

























false
FY
0001849221





































































































































P5Y






























0001849221


2023-04-01
2024-03-31




0001849221


2024-06-26




0001849221


2024-01-01
2024-03-31




0001849221


2024-03-31




0001849221


2023-03-31




0001849221

PMNT:SeriesAAndSeriesBConvertiblePreferredStockMember



2024-03-31




0001849221

PMNT:SeriesAAndSeriesBConvertiblePreferredStockMember



2023-03-31




0001849221


2022-04-01
2023-03-31




0001849221

PMNT:WholesaleRevenueMember



2023-04-01
2024-03-31




0001849221

PMNT:WholesaleRevenueMember



2022-04-01
2023-03-31




0001849221

PMNT:EcommerceRevenueMember



2023-04-01
2024-03-31




0001849221

PMNT:EcommerceRevenueMember



2022-04-01
2023-03-31




0001849221

us-gaap:PreferredStockMember
PMNT:SeriesAConvertibleMember



2022-03-31




0001849221

us-gaap:PreferredStockMember
PMNT:SeriesBConvertibleMember



2022-03-31




0001849221

us-gaap:CommonStockMember



2022-03-31




0001849221

us-gaap:AdditionalPaidInCapitalMember



2022-03-31




0001849221

us-gaap:AccumulatedOtherComprehensiveIncomeMember



2022-03-31




0001849221

us-gaap:RetainedEarningsMember



2022-03-31




0001849221


2022-03-31




0001849221

us-gaap:PreferredStockMember
PMNT:SeriesAConvertibleMember



2023-03-31




0001849221

us-gaap:PreferredStockMember
PMNT:SeriesBConvertibleMember



2023-03-31




0001849221

us-gaap:CommonStockMember



2023-03-31




0001849221

us-gaap:AdditionalPaidInCapitalMember



2023-03-31




0001849221

us-gaap:AccumulatedOtherComprehensiveIncomeMember



2023-03-31




0001849221

us-gaap:RetainedEarningsMember



2023-03-31




0001849221

us-gaap:PreferredStockMember
PMNT:SeriesAConvertibleMember



2022-04-01
2023-03-31




0001849221

us-gaap:PreferredStockMember
PMNT:SeriesBConvertibleMember



2022-04-01
2023-03-31




0001849221

us-gaap:CommonStockMember



2022-04-01
2023-03-31




0001849221

us-gaap:AdditionalPaidInCapitalMember



2022-04-01
2023-03-31




0001849221

us-gaap:AccumulatedOtherComprehensiveIncomeMember



2022-04-01
2023-03-31




0001849221

us-gaap:RetainedEarningsMember



2022-04-01
2023-03-31




0001849221

us-gaap:PreferredStockMember
PMNT:SeriesAConvertibleMember



2023-04-01
2024-03-31




0001849221

us-gaap:PreferredStockMember
PMNT:SeriesBConvertibleMember



2023-04-01
2024-03-31




0001849221

us-gaap:CommonStockMember



2023-04-01
2024-03-31




0001849221

us-gaap:AdditionalPaidInCapitalMember



2023-04-01
2024-03-31




0001849221

us-gaap:AccumulatedOtherComprehensiveIncomeMember



2023-04-01
2024-03-31




0001849221

us-gaap:RetainedEarningsMember



2023-04-01
2024-03-31




0001849221

us-gaap:PreferredStockMember
PMNT:SeriesAConvertibleMember



2024-03-31




0001849221

us-gaap:PreferredStockMember
PMNT:SeriesBConvertibleMember



2024-03-31




0001849221

us-gaap:CommonStockMember



2024-03-31




0001849221

us-gaap:AdditionalPaidInCapitalMember



2024-03-31




0001849221

us-gaap:AccumulatedOtherComprehensiveIncomeMember



2024-03-31




0001849221

us-gaap:RetainedEarningsMember



2024-03-31




0001849221

PMNT:EmployeesMember



2023-04-01
2024-03-31




0001849221

PMNT:EmployeesMember



2022-04-01
2023-03-31




0001849221

PMNT:LegalAndConsultingServicesMember



2023-04-01
2024-03-31




0001849221

PMNT:LegalAndConsultingServicesMember



2022-04-01
2023-03-31




0001849221

us-gaap:IPOMember



2023-04-01
2024-03-31




0001849221

country:GB
PMNT:PropertyAndEquipmentIntangibleAssetsAndOperatingLeaseRightOfUseAssetsMember



2024-03-31




0001849221

country:HK
PMNT:PropertyAndEquipmentIntangibleAssetsAndOperatingLeaseRightOfUseAssetsMember



2024-03-31




0001849221

country:GB
PMNT:PropertyAndEquipmentIntangibleAssetsAndOperatingLeaseRightOfUseAssetsMember



2023-03-31




0001849221

country:HK
PMNT:PropertyAndEquipmentIntangibleAssetsAndOperatingLeaseRightOfUseAssetsMember



2023-03-31




0001849221

us-gaap:SupplierConcentrationRiskMember
us-gaap:CostOfGoodsProductLineMember
PMNT:SupplierOneMember
PMNT:EverichGarmentsGroupLtdMember



2023-04-01
2024-03-31




0001849221

us-gaap:SupplierConcentrationRiskMember
us-gaap:CostOfGoodsProductLineMember
PMNT:SupplierOneMember
PMNT:EverichGarmentsGroupLtdMember



2022-04-01
2023-03-31




0001849221

us-gaap:SupplierConcentrationRiskMember
us-gaap:CostOfGoodsProductLineMember
PMNT:SupplierOneMember
PMNT:TorayInternationalIncMember



2023-04-01
2024-03-31




0001849221

us-gaap:SupplierConcentrationRiskMember
us-gaap:CostOfGoodsProductLineMember
PMNT:SupplierOneMember
PMNT:TorayInternationalIncMember



2022-04-01
2023-03-31




0001849221

us-gaap:CustomerConcentrationRiskMember
us-gaap:SalesRevenueNetMember
PMNT:CustomerOneMember



2023-04-01
2024-03-31




0001849221

us-gaap:CustomerConcentrationRiskMember
us-gaap:SalesRevenueNetMember
PMNT:CustomerOneMember



2022-04-01
2023-03-31




0001849221

us-gaap:CustomerConcentrationRiskMember
us-gaap:AccountsReceivableMember
PMNT:CustomerOneMember



2023-03-31




0001849221

us-gaap:CustomerConcentrationRiskMember
us-gaap:AccountsReceivableMember
PMNT:TwoCustomerMember



2023-04-01
2024-03-31




0001849221

us-gaap:CustomerConcentrationRiskMember
us-gaap:AccountsReceivableMember
PMNT:OneCustomerMember



2022-04-01
2023-03-31




0001849221

us-gaap:CustomerConcentrationRiskMember
us-gaap:AccountsPayableMember
PMNT:OneVendorsMember



2023-04-01
2024-03-31




0001849221

us-gaap:CustomerConcentrationRiskMember
us-gaap:AccountsPayableMember
PMNT:TwoVendorsMember



2023-04-01
2024-03-31




0001849221

us-gaap:CustomerConcentrationRiskMember
us-gaap:AccountsPayableMember
PMNT:ThreeVendorsMember



2023-04-01
2024-03-31




0001849221

us-gaap:CustomerConcentrationRiskMember
us-gaap:AccountsPayableMember
PMNT:OneVendorsMember



2022-04-01
2023-03-31




0001849221

us-gaap:CustomerConcentrationRiskMember
us-gaap:AccountsPayableMember
PMNT:TwoVendorsMember



2022-04-01
2023-03-31




0001849221

us-gaap:CustomerConcentrationRiskMember
us-gaap:AccountsPayableMember
PMNT:ThreeVendorsMember



2022-04-01
2023-03-31




0001849221

PMNT:SeriesAConvertiblePreferredStockMember
us-gaap:IPOMember



2024-02-12
2024-02-12




0001849221

PMNT:SeriesBConvertiblePreferredStockMember
us-gaap:IPOMember



2024-02-12
2024-02-12




0001849221


2024-02-12




0001849221


2024-02-12
2024-02-12




0001849221

us-gaap:CommonStockMember



2024-02-12
2024-02-12




0001849221

us-gaap:CommonStockMember
us-gaap:IPOMember



2024-02-12
2024-02-12




0001849221

PMNT:EuropeExcludingUnitedKingdomMember



2023-04-01
2024-03-31




0001849221

PMNT:EuropeExcludingUnitedKingdomMember



2022-04-01
2023-03-31




0001849221

country:US



2023-04-01
2024-03-31




0001849221

country:US



2022-04-01
2023-03-31




0001849221

country:GB



2023-04-01
2024-03-31




0001849221

country:GB



2022-04-01
2023-03-31




0001849221

PMNT:RestOfTheWorldMember



2023-04-01
2024-03-31




0001849221

PMNT:RestOfTheWorldMember



2022-04-01
2023-03-31




0001849221

us-gaap:FurnitureAndFixturesMember



2024-03-31




0001849221

us-gaap:OfficeEquipmentMember
srt:MinimumMember



2024-03-31




0001849221

us-gaap:OfficeEquipmentMember
srt:MaximumMember



2024-03-31




0001849221

us-gaap:LeaseholdImprovementsMember



2024-03-31




0001849221

us-gaap:SoftwareAndSoftwareDevelopmentCostsMember



2024-03-31




0001849221

us-gaap:ComputerEquipmentMember



2024-03-31




0001849221

PMNT:OptionsToAcquireCommonStockMember



2023-04-01
2024-03-31




0001849221

PMNT:OptionsToAcquireCommonStockMember



2022-04-01
2023-03-31




0001849221

us-gaap:RestrictedStockMember



2023-04-01
2024-03-31




0001849221

us-gaap:RestrictedStockMember



2022-04-01
2023-03-31




0001849221

us-gaap:WarrantMember



2023-04-01
2024-03-31




0001849221

us-gaap:WarrantMember



2022-04-01
2023-03-31




0001849221

PMNT:SeriesAConvertiblePreferredStockMember



2023-04-01
2024-03-31




0001849221

PMNT:SeriesAConvertiblePreferredStockMember



2022-04-01
2023-03-31




0001849221

PMNT:SeriesBConvertiblePreferredStockMember



2023-04-01
2024-03-31




0001849221

PMNT:SeriesBConvertiblePreferredStockMember



2022-04-01
2023-03-31




0001849221

PMNT:ConvertibleDebtFinancingMember



2023-04-01
2024-03-31




0001849221

PMNT:ConvertibleDebtFinancingMember



2022-04-01
2023-03-31




0001849221

us-gaap:FurnitureAndFixturesMember



2023-03-31




0001849221

us-gaap:OfficeEquipmentMember



2024-03-31




0001849221

us-gaap:OfficeEquipmentMember



2023-03-31




0001849221

us-gaap:LeaseholdImprovementsMember



2023-03-31




0001849221

us-gaap:SoftwareAndSoftwareDevelopmentCostsMember



2023-03-31




0001849221

us-gaap:ComputerEquipmentMember



2023-03-31




0001849221

PMNT:TradeFinancefacilityMember



2024-03-31




0001849221

PMNT:TradeFinancefacilityMember



2023-03-31




0001849221

PMNT:TradeFinancefacilityMember
PMNT:SuppliersByHSBCMember



2024-03-31




0001849221

PMNT:HongKongInterbankOfferedRateMember



2023-04-01
2024-03-31




0001849221

us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember



2023-04-01
2024-03-31




0001849221

us-gaap:StandbyLettersOfCreditMember
PMNT:TradeFinancefacilityMember
PMNT:UBSSwitzerlandAGMember



2024-03-31




0001849221

srt:BoardOfDirectorsChairmanMember



2024-03-31




0001849221

us-gaap:CorporateDebtSecuritiesMember
srt:BoardOfDirectorsChairmanMember



2024-03-31




0001849221

PMNT:UBSSwitzerlandAGMember



2023-04-01
2024-03-31




0001849221

PMNT:JoachimGottschalkAndAssociatesLtdMember
us-gaap:StandbyLettersOfCreditMember
PMNT:UBSSwitzerlandAGMember



2023-05-31




0001849221

us-gaap:StandbyLettersOfCreditMember
PMNT:JoachimGottschalkAndAssociatesLtdMember



2023-04-01
2024-03-31




0001849221

PMNT:JoachimGottschalkAndAssociatesLtdMember



2024-03-31




0001849221

us-gaap:CorporateDebtSecuritiesMember
us-gaap:StandbyLettersOfCreditMember
PMNT:UBSSwitzerlandAGMember



2024-03-31




0001849221

us-gaap:CorporateDebtSecuritiesMember
us-gaap:StandbyLettersOfCreditMember
PMNT:UBSSwitzerlandAGMember



2023-04-01
2024-03-31




0001849221

srt:MinimumMember
PMNT:JoachimGottschalkAndAssociatesLtdMember



2023-04-01
2024-03-31




0001849221

srt:MaximumMember
PMNT:JoachimGottschalkAndAssociatesLtdMember



2023-04-01
2024-03-31




0001849221

us-gaap:CorporateDebtSecuritiesMember



2024-03-31




0001849221

PMNT:JoachimGottschalkAndAssociatesLtdMember



2023-04-01
2024-03-31




0001849221

PMNT:JoachimGottschalkAndAssociatesLtdMember



2022-04-01
2023-03-31




0001849221

PMNT:FourtySevenInvestorsMember



2021-03-01
2021-03-31




0001849221

PMNT:FourtySevenInvestorsMember



2021-03-31




0001849221

PMNT:FourtySevenInvestorsMember



2022-04-01
2022-07-31




0001849221

PMNT:FourtySevenInvestorsMember



2022-07-31




0001849221

us-gaap:IPOMember



2021-03-01
2021-03-31




0001849221


2021-03-01
2021-03-31




0001849221


2023-12-01
2023-12-31




0001849221


2024-01-01
2024-01-31




0001849221

us-gaap:IPOMember



2024-02-12




0001849221

us-gaap:IPOMember



2024-02-12
2024-02-12




0001849221

us-gaap:CommonStockMember



2023-05-01
2023-08-31




0001849221

us-gaap:CommonStockMember



2023-08-31




0001849221

PMNT:UnderwritingAgreementMember
PMNT:ThinkEquityLLCMember



2024-02-07
2024-02-07




0001849221

PMNT:UnderwritingAgreementMember
PMNT:ThinkEquityLLCMember



2024-02-07




0001849221


2023-09-30




0001849221

PMNT:UnderwriterWarrantsMember



2024-02-12




0001849221

PMNT:NonEmployeeMember



2021-01-01
2021-01-31




0001849221

PMNT:NonEmployeeMember



2021-03-01
2021-03-31




0001849221

PMNT:NonEmployeeMember
PMNT:ClawbackProvisionMember



2022-04-01
2023-03-31




0001849221

PMNT:ConsultantMember



2021-10-01
2021-10-31




0001849221

PMNT:ConsultantMember



2022-04-01
2022-12-31




0001849221

srt:MaximumMember
us-gaap:IPOMember



2021-10-31




0001849221

srt:MinimumMember
us-gaap:IPOMember



2021-10-31




0001849221

us-gaap:AdditionalPaidInCapitalMember
us-gaap:IPOMember



2022-04-01
2023-03-31




0001849221

PMNT:SeriesAConvertiblePreferredStockMember



2021-03-15
2021-03-15




0001849221

PMNT:SeriesAConvertiblePreferredStockMember



2021-03-15




0001849221

us-gaap:SeriesAPreferredStockMember



2024-02-12
2024-02-12




0001849221

PMNT:SeriesBConvertiblePreferredStockMember



2022-09-23




0001849221

PMNT:SeriesBConvertiblePreferredStockMember



2022-09-01
2022-11-30




0001849221

PMNT:SeriesBConvertiblePreferredStockMember



2022-09-23
2022-09-23




0001849221

us-gaap:SeriesBPreferredStockMember



2024-02-12
2024-02-12




0001849221

PMNT:TwoThousandTwentyOneIncentivePlanMember



2024-03-31




0001849221

srt:MinimumMember



2023-04-01
2024-03-31




0001849221

srt:MaximumMember



2023-04-01
2024-03-31




0001849221


2021-04-01
2022-03-31




0001849221

srt:MinimumMember
us-gaap:OptionMember



2023-04-01
2024-03-31




0001849221

srt:MaximumMember
us-gaap:OptionMember



2023-04-01
2024-03-31




0001849221

us-gaap:OptionMember



2022-04-01
2023-03-31




0001849221

us-gaap:OptionMember



2023-04-01
2024-03-31




0001849221

srt:MinimumMember
us-gaap:OptionMember



2022-04-01
2023-03-31




0001849221

srt:MaximumMember
us-gaap:OptionMember



2022-04-01
2023-03-31




0001849221

us-gaap:WarrantMember



2023-03-31




0001849221

us-gaap:WarrantMember



2023-04-01
2024-03-31




0001849221

us-gaap:WarrantMember



2024-03-31




0001849221

country:HK



2023-04-01
2024-03-31




0001849221

PMNT:GBPMember



2024-03-31




0001849221

PMNT:GBPMember



2023-03-31




0001849221

PMNT:HKDMember



2024-03-31




0001849221

PMNT:HKDMember



2023-03-31




0001849221

PMNT:CHFMember



2024-03-31




0001849221

PMNT:CHFMember



2023-03-31




0001849221

PMNT:GBPMember



2023-04-01
2024-03-31




0001849221

PMNT:GBPMember



2022-04-01
2023-03-31




0001849221

PMNT:HKDMember



2023-04-01
2024-03-31




0001849221

PMNT:HKDMember



2022-04-01
2023-03-31




0001849221

PMNT:CHFMember



2023-04-01
2024-03-31




0001849221

PMNT:CHFMember



2022-04-01
2023-03-31




0001849221

PMNT:USDMember



2024-03-31




0001849221

PMNT:USDMember



2023-03-31




0001849221

PMNT:EURMember



2024-03-31




0001849221

PMNT:EURMember



2023-03-31




0001849221

PMNT:CNYMember



2024-03-31




0001849221

PMNT:CNYMember



2023-03-31




0001849221

PMNT:CashHeldByChaseMember



2024-03-31




0001849221

PMNT:CashHeldByChaseMember



2023-03-31




0001849221

PMNT:CashHeldByHSBCMember



2024-03-31




0001849221

PMNT:CashHeldByHSBCMember



2023-03-31




0001849221

PMNT:CashHeldByOtherBanksMember



2024-03-31




0001849221

PMNT:CashHeldByOtherBanksMember



2023-03-31




0001849221

PMNT:CashHeldByThirdPartyMember



2024-03-31




0001849221

PMNT:CashHeldByThirdPartyMember



2023-03-31




0001849221

PMNT:PettyCashMember



2024-03-31




0001849221

PMNT:PettyCashMember



2023-03-31




0001849221

PMNT:NonEmployeesMember



2024-03-31




0001849221

PMNT:NonEmployeesMember



2023-03-31




0001849221

PMNT:DeliberateSoftwareLimitedMember



2023-04-01
2024-03-31




0001849221

PMNT:DeliberateSoftwareLimitedMember



2022-04-01
2023-03-31




0001849221

PMNT:DeliberateSoftwareLimitedMember



2024-03-31




0001849221

PMNT:DeliberateSoftwareLimitedMember



2023-03-31




0001849221

PMNT:DeliberateSoftwareLimitedMember
us-gaap:SeriesAPreferredStockMember



2023-03-31




0001849221

PMNT:DeliberateSoftwareLimitedMember
us-gaap:CommonStockMember



2023-03-31




0001849221

PMNT:SparkCapitalLimitedMember



2022-06-29




0001849221

PMNT:SparkCapitalLimitedMember



2022-06-29
2022-06-29




0001849221

PMNT:SparkCapitalLimitedMember



2022-04-01
2023-03-31




0001849221

PMNT:SimonNicholasChampMember
us-gaap:SeriesAPreferredStockMember



2023-03-31




0001849221

PMNT:SimonNicholasChampMember
us-gaap:CommonStockMember



2023-03-31




0001849221

us-gaap:StandbyLettersOfCreditMember
PMNT:UBSSwitzerlandAGMember
PMNT:TradeFinancefacilityMember



2023-06-26




0001849221

us-gaap:StandbyLettersOfCreditMember
PMNT:UBSSwitzerlandAGMember
PMNT:TradeFinancefacilityMember



2023-06-26
2023-06-26




0001849221

us-gaap:StandbyLettersOfCreditMember
PMNT:UBSSwitzerlandAGMember
PMNT:TradeFinancefacilityMember
srt:MaximumMember



2023-06-26
2023-06-26




0001849221

us-gaap:StandbyLettersOfCreditMember
PMNT:UBSSwitzerlandAGMember
PMNT:TradeFinancefacilityMember
PMNT:MrGottschalkMember



2023-06-26




0001849221

PMNT:MaxGottschalkMember



2024-03-31




0001849221

PMNT:MaxGottschalkMember



2023-04-01
2024-03-31




0001849221

PMNT:MaxGottschalkMember



2022-04-01
2023-03-31




0001849221

PMNT:JaneGottschalkMember



2023-04-01
2024-03-31




0001849221

PMNT:JaneGottschalkMember



2022-04-01
2023-03-31




0001849221

PMNT:TracyBarwinMember



2023-04-01
2024-03-31




0001849221

PMNT:TracyBarwinMember



2022-04-01
2023-03-31




0001849221

PMNT:AndreasKeijsersMember



2023-04-01
2024-03-31




0001849221

PMNT:AndreasKeijsersMember



2022-04-01
2023-03-31




0001849221

PMNT:MaxGottschalkMember
PMNT:ConsultingAgreementMember
PMNT:FromAprilTwoThousandTwentyOneMember



2019-05-15
2019-05-15




0001849221

PMNT:MaxGottschalkMember
PMNT:ConsultingAgreementMember
PMNT:SinceDecemberTwoThousandTwentyTwoMember



2019-05-15
2019-05-15




0001849221

PMNT:JaneGottschalkMember
PMNT:ConsultingAgreementMember
PMNT:SinceAprilOneTwoThousandNineteenMember



2018-04-30
2018-04-30




0001849221

PMNT:TracyBarwinMember
PMNT:ConsultingAgreementMember



2022-11-18
2022-11-18




0001849221

PMNT:AndreKeijsersMember
PMNT:ConsultingAgreementMember



2017-02-28
2017-02-28




0001849221

us-gaap:SubsequentEventMember
us-gaap:EmployeeStockOptionMember
PMNT:EmployeesMember



2024-06-18
2024-06-18



iso4217:USD


xbrli:shares




iso4217:USD


xbrli:shares




iso4217:GBP


PMNT:Segment


xbrli:pure


iso4217:HKD


iso4217:CHF


iso4217:EUR


iso4217:CNY












 

 
 
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
 
FORM
10-K
 
(Mark
One)
 
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For
the fiscal year ended: March 31, 2024
 
or
 
☐
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For
the transition period from ____________ to ____________
 
Commission
file number: 001-41930
 
Perfect
Moment Ltd.
(Exact
name of registrant as specified in its charter)
 


Delaware
 
86-1437114

State
    or other jurisdiction of
 
(I.R.S.
    Employer

incorporation
    or organization
 
Identification
    No.)

 


307
                                            Canalot Studios
222
    Kensal Road
London,
    United Kingdom
 

W10
    5BN

(Address
    of principal executive offices)
 
(Zip
    Code)

 
Registrant’s
telephone number, including area code: +44 (0) 204 558 8849
 
Securities
registered pursuant to Section 12(b) of the Act
 


Title
    of each class
 
Trading
    Symbol(s)
 
Name
    of each exchange on which registered

Common
    Stock, $0.0001 par value
 
PMNT
 
NYSE
    American LLC

 
Securities
registered pursuant to Section 12(g) of the Act: None
 
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
 
Yes
☐ No ☒
 
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
 
Yes
☐ No ☒
 
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
 
Yes
☒ No ☐
 
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
 
Yes
☒ No ☐
 
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act
 


Large
    accelerated filer
☐
Accelerated
    filer
☐

 
 
 
 

Non-accelerated
    filer
☒
Smaller
    reporting company
☒

 
 
 
 

 
Emerging
    growth company
☒

 
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
 
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
 
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
 
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐  Yes ☒ No
 
The registrant was not a public company as of September 30, 2023, the last business day of the registrant’s
most recently completed second fiscal quarter, and therefore it cannot calculate the aggregate market value of its voting and non-voting
common equity held by non-affiliates at such date. The registrant’s common shares began trading on the NYSE American on February
8, 2024.
 
As
of June 26, 2024, there were 15,653,449 shares of common stock, $0.0001 par value per share, outstanding.
 
DOCUMENTS
INCORPORATED BY REFERENCE
None
 

 
 

 
 

 
TABLE
OF CONTENTS
 


PART
    I
1

ITEM 1. BUSINESS
1

ITEM 1A. RISK FACTORS
12

ITEM 1B. UNRESOLVED STAFF COMMENTS
36

ITEM 1C. CYBERSECURITY
36

ITEM 2. PROPERTIES
36

ITEM 3. LEGAL PROCEEDINGS
36

ITEM 4. MINE SAFETY DISCLOSURES
36

PART II
37

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
37

ITEM 6. [RESERVED]
37

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
37

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
53

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
53

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
53

ITEM 9A. CONTROLS AND PROCEDURES
53

ITEM 9B. OTHER INFORMATION
54

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
54

PART III
54

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
54

ITEM 11. EXECUTIVE COMPENSATION
61

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
72

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
74

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
76

PART IV
76

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
76

ITEM 16. FORM 10-K SUMMARY
76

 

ii
 

 
CAUTIONARY
NOTE REGARDING Forward-Looking Statements
 
This
Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (this “Annual Report”) contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements are subject to considerable risks and
uncertainties. These forward-looking statements are not historical facts but rather are plans and predictions based on current expectations,
estimates, and projections about our industry, our beliefs, and assumptions.
 
Forward-looking
statements relate to matters such as our industry, business plans and strategies, material contracts, key relationships, consumer behavior,
revenue, expenses, margins, profitability, capital expenditures, liquidity, capital resources and other operating information, and can
be identified by words such as “may,” “will,” “could,” “should,” “anticipate,”
“expect,” “intend,” “project,” “plan,” “believe,” “seek,” “assume,”
and variations of these words and similar expressions. All of our forward-looking statements include assumptions underlying or relating
to such statements that may cause actual results to differ materially from those that we are currently expecting, and are subject to
considerable risks and uncertainties, including without limitation:
 


 
●
our
    expectations regarding our revenue, expenses, profitability and other operating results;

 
●
the
    growth rates of the markets in which we compete; 

 
●
the
    costs and effectiveness of our marketing efforts, as well as our ability to promote our brand;

 
●
our
    ability to provide quality products that are acceptable to our customers;

 
●
our
    reliance on key personnel and our ability to identify, recruit and retain skilled personnel; 

 
●
our
    ability to effectively manage our growth, including offering new product categories and any international expansion;

 
●
our
    ability to protect our intellectual property rights and avoid disputes in connection with the use of intellectual property rights
    of others;

 
●
our
    ability to protect our users’ information and comply with growing and evolving data privacy laws and regulations;

 
●
future
    investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements;

 
●
our
    ability to compete effectively with existing competitors and new market entrants; and

 
●
our
    success at managing the risks involved in the foregoing.

 
The
forward-looking statements contained in this Annual Report are based on management’s current plans, estimates and expectations
in light of information currently available to us, and they are subject to uncertainty and changes in circumstances. There can be no
assurance that future developments affecting us will be those we have anticipated. Actual results may differ materially from these expectations
due to changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors, many of
which are beyond our control, as well as the other factors described in the section entitled “Risk Factors” within
this Annual Report and in the other reports we file with the Securities and Exchange Commission (“SEC”). These risks and
uncertainties include those described in the section entitled “Risk Factors.”
 
You
should not place undue reliance on these forward-looking statements. Our forward-looking statements are based on the information currently
available to us and speak only as of the date on which they were made. Additional factors or events that could cause our actual results
to differ may also emerge from time to time, and it is not possible for us to predict all of them. Over time, our actual results, performance,
or achievements may differ from those expressed or implied by our forward-looking statements, and such a difference might be significant
and materially adverse to our security holders. Comparisons of results for current and any prior periods are not intended to express
any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data. Except
as required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information,
future events, or otherwise. We have identified some of the important factors that could cause future events to differ from our current
expectations and they are described in this Annual Report under the captions “Risk Factors,” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” as well as in other documents that we may file with
the SEC, all of which you should review carefully. We qualify all of our forward-looking statements by these disclaimers.
 

iii
 

 
PART
I
 
ITEM
1. BUSINESS
 
Overview
 
Perfect
Moment Ltd., a Delaware corporation (“Perfect Moment,” “we,” “our,” or “us”), is a
high-performance, luxury skiwear and lifestyle brand that fuses technical excellence with fashion-led designs. We create apparel
and products that feature what we believe is an unmatched combination of fashion, form, function and fun for women, men and children.
 
The
idea for the Perfect Moment brand was born in Chamonix, France in 1984, when the professional skier and extreme sports filmmaker, Thierry
Donard, began making apparel for his team of free-ride skiers and surfers. Donard used his experience to create designs that were characterized
by quality, style and performance to enable his athletes to achieve their perfect ski-run or perfect wave-ride: that “perfect moment.”
His designs – combining high performance materials with daring prints and colors – were inspired by his team of free-ride
skiers and surfers.
 
In
May 2012, Mr. Donard assigned the Perfect Moment trademark to Perfect Moment TM Sarl (“TMS”), a then newly incorporated Swiss
company, 50% of which was owned by Mr. Donard and 50% of which was owned by Fermain Limited, an entity controlled by Max Gottschalk,
who is the Chairman of our board of directors, and Jane Gottschalk, who is our Chief Creative Officer and a member of our board of directors.
Perfect Moment Asia Limited (“PMA”) was also incorporated in May 2012 and PMA entered into a licensing agreement with TMS
for the Perfect Moment trademark. The Perfect Moment brand was then relaunched by Max and Jane Gottschalk. Perfect Moment (UK) Limited,
a United Kingdom corporation (“PMUK”) was later incorporated in July 2017 as a wholly owned subsidiary of PMA, for the primary
purpose of online sales of finished goods. Between December 2017 and November 2018, PMA acquired 100% of the equity of TMS from Mr. Donard
and Fermain. In March 2021, we effected a reorganization, in which all of the equity of PMA was exchanged for newly issued shares of
Perfect Moment Ltd. common stock and Series A convertible preferred stock, which preferred stock was converted to common stock in connection
with the closing of our initial public offering on February 12, 2024. In July 2021, TMS assigned the Perfect Moment trademark to PMUK.
On January 17, 2024, the Company established a wholly owned U.S. subsidiary, Perfect Moment USA Inc. (“PMU”), incorporated
in the State of Delaware. Some of the production team still sits in Hong Kong but the majority of the employees, including the majority
of production, design, marketing and finance teams, and all senior management (other than our Chief Financial Officer, who is located
in the United States) and our board of directors are located in the United Kingdom (other than Berndt Hauptkorn, who is located in France).
 
Today,
the brand continues to draw on its rich heritage of performance garments and statement designs. Retro-inspired vivid and bold color palates
complement technical fabrics to deliver fashion, form, function and fun for women, men and children. Initially known for its on-and-off
the slopes skiwear, in 2016 PMA developed a summer range inspired by the island of Ibiza to bring its unique style to swimwear and activewear.
We believe our bold fashion and technical proposition resonates with the modern fashion-conscious consumer that sees value in authentic
European heritage and statement-design tailored for an active and healthy lifestyle at a compelling quality-to-value price point.
 
Our
Industry
 
We
operate at the intersection of luxury fashion and multi-channel commerce. The global luxury industry is large and characterized by specific
market dynamics and consumer trends that are shaping the future of the industry, including the following:
 
Large,
Stable and Resilient Addressable Markets
 
We
have an attractive luxury ski apparel market in which we believe is well-positioned and has a large growth runway. According to EIN Presswire,
the global luxury ski wear market was valued at $1.6 billion in 2022 and is expected to expand at a Compound Annual Growth Rate (“CAGR”)
of 6.35% reaching $2.4 billion by 2028. We believe the global luxury ski wear market has a relatively narrow target demographic and that
this demographic is characterized by relatively high affluence and either proximity to a ski area or a location with a traditional interest
in skiing as a recreational activity. We believe that due to the relatively high affluence and international nature of the demographic,
there has been, and continues to be, significant space for premium and luxury products that deliver both fashion and technical performance.
 

1
 

 
We
have started to make inroads into the adjacent, significantly larger, global luxury outerwear market, which we believe is set to continue
growing, yet remains somewhat fragmented and localized. The global luxury outerwear market, compared to the global luxury ski wear market,
is a larger and faster growing market. According to Research Reports World, the global luxury outerwear market was valued at $15.9 billion
in 2022 and is expected to expand at a CAGR of 6.51% reaching $23.2 billion by 2028. Again, we believe the demographic for this market
has relatively high affluence but has a broader geographical spread as it is not linked to the activity of skiing. In the global luxury
outerwear market, we believe an increasingly large number of consumers are turning to heritage brands with technical credentials for
luxury outerwear products that not only serve a technical function but also make a fashion statement.
 
In
addition, Perfect Moment is also targeting the broader leisure markets for swimwear, activewear and lifestyle products. Both the global
luxury ski wear market and global luxury outerwear market share some key consumer demographics and purchasing behavior with the broader
leisure markets. We believe these markets stretch beyond skiing and winter sports to a range of healthy and athletic pursuits, with products
increasingly being worn as part of a broader day-to-day lifestyle statement. We also believe the growth of this market goes hand-in-hand
with broader cultural shifts, such as a greater emphasis on health, exercise and well-being, as well as a relaxation in dress codes at
work and for social occasions. Based on the characteristics of these respective markets, we believe Perfect Moment has the right brand
profile, geographic footprint, target demographic, marketing tools and operational expansion plan to gain significant share.
 
Luxury
Channel Shift to Online
 
According
to Bain & Company (“Bain”), online is set to become the leading channel for luxury purchases by 2030. The online share
of the global personal luxury goods market in 2017 was 9%, significantly lower than other retail markets, according to Bain, which has
been driven by luxury brands’ cautious approach to adopting technology and social platforms; however, online sales accounted for
22% of the luxury goods market in 2021 and online sales are expected to become a larger percentage of the total luxury market, reaching
32% to 34% by 2030.
 
Transition
to Digital
 
We
believe the digital shopping behavior of consumers is evolving at a rapid pace and the shift to digital is affecting how the luxury industry
and consumers interact. Ecommerce sales have climbed steadily for years, according to Statista, with continuous further growth
expected. Statista estimates a growth in global ecommerce market revenue from approximately $2.4 billion in 2017 to approximately
$8.1 billion in 2026, and with the COVID-19 pandemic, ecommerce use among consumers has advanced even faster than expected. Since
the start of the COVID-19 pandemic in March 2020, according to Statista, there have been a significant number of first-time online shoppers
around the world.
 
On
the marketing side, we believe that inspiration and trends have shifted from editorial content on the printed pages of monthly fashion
magazines to the real-time social media channels of the world’s leading fashion bloggers, influencers and celebrities.
 
Generational
Demographic Shift
 
As
new generations of global luxury consumers account for a larger share of spending, we believe they are fundamentally changing the way
luxury products are purchased. According to Bain, Generation Y and Generation Z accounted for all of the market’s growth in 2022.
The spending of Generation Z and the younger Generation Alpha is set to grow three times faster than that of other generations though
2030, making up a third of the market. Generation Y, Generation Z and Generation Alpha are forecast by Bain to become the biggest buyers
of luxury by 2030, representing 80% of global purchases.
 
Emerging
Markets and Future Growth
 
We
believe the demand for luxury fashion is truly global. According to Bain, consumers of luxury fashion have traditionally been from Europe
and the Americas, but, by 2030, mainland China is forecasted to surpass the Americas and Europe in having the biggest global luxury market.
Growth of the global luxury goods market is expected to be significantly driven by demand from China and from emerging markets, including
India and emerging Southeast Asian and African countries, based on forecasts between 2022 and 2030. Chinese consumers are forecast by
Bain to regain their pre-COVID-19 status as the dominant nationality for luxury, growing to represent circa 40% of global purchases by
2030.
 

2
 

 
Our
Strengths
 


 
●
Strong
    Brand Positioning. Perfect Moment’s affordable luxury offering sits below the ultra-luxury positioning and luxury performance
    positioning by our direct luxury competitors. Most of our competitors skew to either fashion or pure performance, while Perfect Moment
    focuses on both.

 
 
 

  
●
Authentic
    Brand That Resonates with Highly Valuable Customer Segments. With the Perfect Moment brand having approximately 40 years
    of European ski and worldwide surf heritage, bold fashion, distinct design aesthetic and technical performance, we believe our products
    and our mission resonate with the modern fashion-conscious consumer who sees value in authentic European heritage and statement-design
    tailored for an active and healthy lifestyle, which generates brand loyalty among our key customers, Generation Y and Generation
    Z consumers, and drives repeat purchases.

 
 
 

 
●
Proven
    and Unique Marketing Engine and Significant Growth Runway. We believe that ecommerce will continue to shape the consumer
    and retail industries by changing shopping behavior as well as contributing to the digital transformation of retail business models,
    which we believe has been accelerated as a direct result of the COVID-19 pandemic. Our retail business commenced and continues to
    exist primarily online. We are a direct-to-consumer retailer that utilizes technology to deliver what we believe is a customer experience
    with a specific focus on engaging and interacting with the Generation Y and Generation Z tech-savvy consumer segment by offering
    speed, convenience and a seamless customer experience. By selling directly through our digital platform, we control all aspects of
    the customer experience and are able to engage with our community before, during and after purchase, through our digital platform
    and social channels. We believe this direct engagement enables us to establish personal relationships at scale and provides us with
    valuable customer data and feedback that we leverage across our organization to better serve our customers. We also have collaborations
    with a growing group of A-list celebrities and influencers whom we consider having an authentic feel and on-brand partner collaborations
    with luxury brands that we believe speak to the same audience. We also focus on top-tier editorial coverage in fashion magazines
    and arrangements with luxury wholesale partners, which include The Wall Street Journal, Forbes, Vogue, Conde Nast Traveler and Harper’s
    Bazaar, to name a few. We believe these marketing efforts will be translated into an engaged lifestyle-driven Instagram community.

 
 
 

  
●
Visionary,
    Passionate and Committed Management Team. Through steady brand discipline and a focus on sustainable growth, our management
    team has transformed a small family business into a global brand. We have assembled a team of seasoned executives from diverse and
    relevant backgrounds who draw on experience working with a wide range of leading global companies including Burberry, Jimmy Choo,
    Michael Kors, Nike, North Face, Rapha, Disney and Elemis. Members of our team have created and grown leading luxury, fashion and
    digital businesses globally, and they retain a strong entrepreneurial spirit. Their leadership and passion have accelerated our evolution
    into a lifestyle brand and the growth of our direct-to-consumer channel alongside strengthening our wholesale business.

 
 
 

 
●
Multi-Channel
    Distribution. Our global distribution strategy allows us to reach customers through two distinct, brand-enhancing channels.
    In our wholesale channel, which as of March 31, 2024 extended into 25 countries, we carefully select the best retail partners and
    distributors to represent our brand in a manner consistent with our heritage and growth strategy. As a result, we believe our wholesale
    partnerships include best-in-class luxury and online retailers. Through our fast growing direct-to-consumer channel, which includes
    our global ecommerce site, we are able to more directly control the customer experience, driving deeper brand engagement and
    loyalty, while also driving towards more favorable margins. Our direct-to-consumer (“DTC”) ecommerce channel,
    www.perfectmoment.com, is complemented by our luxury marketplace partnerships globally and in emerging markets. We employ product
    supply discipline across both of our channels to manage scarcity, preserve brand strength and optimize profitable growth for us and
    our retail partners. Going forward, we plan to open a limited number of pop-up and retail stores in major metropolitan centers as
    well as premium outdoor destinations where we believe they can operate profitably. To further support our customers and increase
    our gross margins we plan on opening third party distribution centers in key markets, targeting an opening in the United States in
    the fiscal year ending March 31, 2025.

 

3
 

 


 
●
Established
    Partner Relationships. As of March 31, 2024, we have two luxury marketplace partners, Farfetch and Amazon Luxury, and 160
    wholesale partners, of which 16 are luxury department stores (including those we believe are the most sought-after and prestigious
    names in the fashion industry), 18 operate as exclusively online multi brand retailers and 90 are respected specialty stores with
    a focus on either sports or winter goods, which is key to our branding strategy.

 
 
 

  
●
Flexible
    Supply Chain. We directly control the design, innovation and testing of our products, which we believe allows us to achieve
    greater operating efficiencies and deliver quality products. We manage our production through long-standing relationships with our
    third-party suppliers and vendors. We believe our flexible supply chain gives us distinct advantages including the ability to broaden
    and scale our operations, adapt to customer demand, shorten product development cycles and achieve higher margins.

 
 
 

  
●
Culture
    of Innovation and Uncompromised Craftsmanship. We strive to create the most innovative, functional, comfortable and stylish
    apparel in the industry. We develop cross-functional products that we believe are characterized by quality, style and performance.
    We continue to use best-in-class materials in every product, and we will continue to innovate.

 
Our
Business Strategy
 
Perfect
Moment sits at the intersection of three large and growing markets (luxury ski apparel, premium outerwear and athleisure and lifestyle).
Based on the characteristics of these respective markets, we believe we have the right brand profile, geographic footprint, target demographic,
marketing tools and operational expansion plan to gain significant market share. We believe we are also well-positioned to drive sustainable
growth and profitability by executing on the following strategies:
 
Grow
Brand Awareness and Attract New Customers
 
Building
brand awareness among potential new customers and strengthening our connections with those who already know us will be a key driver of
our growth. While we believe our brand has achieved substantial traction globally and those who have experienced our products demonstrate
strong loyalty, our presence is relatively nascent in many of our markets. We believe we have a significant opportunity to increase brand
awareness and attract new customers to Perfect Moment through word of mouth, brand marketing and performance marketing.
 
In
the past, Perfect Moment’s strong skiing heritage has been used to engage with a core ski audience for whom we believe the combination
of technical performance and retro inspired designs resonate strongly. We believe the nature of skiing as a largely affluent, international
pursuit means there is a large opportunity in aspirational, lifestyle-led social media engagement. We believe Perfect Moment has captured
this social media opportunity to great effect, combining the style and form of the brand with celebrities, influencers, top-tier editorial,
collaborations and luxury locations to create a distinct, fun and engaging aspirational lifestyle narrative. Beyond social media, we
believe Perfect Moment has been able to deploy this same core brand proposition and narrative to direct digital marketing and traditional
media, elevating brand profile and driving high levels of engagement simultaneously. Perfect Moment has also been able to build an effective
online marketing engine driving large volumes of direct, organic search and paid search traffic to our ecommerce website, www.perfectmoment.com.
 
We
expect to continue this approach to social media, building our follower base through a similar and evolving mix of celebrities, influencers,
editorials and locations. We also expect to continue to pursue and scale the effective search engine optimization and paid search strategies
which have contributed to online sales growth, as well as direct marketing and customer engagement via their successful newsletter. Perfect
Moment is developing plans to leverage a new Perfect Moment owned physical store network to deepen its brand identity and profile, as
well as drive higher levels of loyalty and engagement at the local level.
 
Brand
marketing and performance marketing also work together to drive millions of visits to our digital platforms. Brand marketing includes
differentiated content, our network of ambassadors, and social media, all of which result in what we believe is outsized engagement with
our community. Our performance marketing efforts are designed to drive customers from awareness to consideration to conversion. These
efforts include retargeting, paid search and product listing advertisements, paid social media advertisements, search engine optimization
and personalized email. We believe our highly productive, diversified strategy generates a significant return on brand equity, driving
sales and building a growing customer database.
 

4
 

 
We
approach this strategy as a funnel, with brand awareness at the top and customer conversion at the bottom, allocating resources across
the top, middle and bottom, and measuring returns on these respective investments.
 
Accelerate
Digital Growth
 
Having
used the wholesale channel to establish our brand globally, we believe we will become less reliant on wholesale partners during the next
five (5) years by committing more resources to our direct-to-consumer strategy and accelerating our digital growth. We believe technology
and partnerships are the key underpinning factors in any ecommerce business and as such we will continue to enhance customer experience,
focusing on mobile as the dominant growth channel and leveraging the emerging benefits of social and conversational commerce.
 
Pursue
International Expansion and Enter New Markets
 
We
believe there is an opportunity to increase penetration across our existing markets and selectively enter new regions. Although the Perfect
Moment brand is recognized globally, our past investments have been focused on North America, the United Kingdom and the EU and have
driven revenue growth in the United States during the past fiscal year.
 
While
we expect the majority of our near-term growth to continue to come from the United States, the United Kingdom and the EU, we believe
there is a tremendous opportunity over the long term throughout the rest of the world. In the fiscal year ended March 31, 2024, we increased
our outreach in what we believe are the most promising countries in continental Europe. As part of the plan to enter new markets, we
will start with China, as we seek to enhance our ability to serve our international customers and further establish Perfect Moment as
a global brand.
 
We
believe there is a significant opportunity beyond our existing markets, with China representing the next market opening for Perfect Moment.
China is projected to become the largest winter sports market, with people participating expected to reach 50 million by 2025 with 1,000
ski resorts to be open by 2030, according to reports by Daxue Consulting and Capital Mind. We allocated a small amount of inventory to
test the Chinese market directly in November 2024 on Tmall, using local partners to operate, with a digital approach to selling. We were
originally forecasting to run losses with respect to such activities for two years, then become profitable from the third year of such
activities, with China representing less than 10% of our revenue by 2027. The data we now have on this small test has led to exploring
partnership models such as a Joint Venture, where we could benefit for local distribution, market expertise and financial support for
inventory and marketing. We still believe the most significant hurdle to overcome with respect to our plan to enter the Chinese market
is liquidity to fund the initial operating losses.
 
In
order to offer a more localized experience to customers internationally, we intend to offer market-specific languages, currency and content,
as well as strategic international shipping and distribution hubs. We plan to leverage our social media strategy and expand our network
of social media ambassadors to grow our brand awareness globally.
 
Enhance
Our Wholesale Network
 
Although
in the next five (5) years we will be mainly focused on accelerating digital growth and our direct-to-consumer channel, we still intend
to continue broadening customer access and strengthening our global foothold in new and existing markets by strategically expanding our
wholesale network and deepening current relationships. In all of our markets, we have an opportunity to increase sales by adding new
wholesale partners and increasing volume in existing retailers. Additionally, we are focused on strengthening relationships with our
retail partners through broader offerings, exclusive products and shop-in-shop formats, which are dedicated spaces within another company’s
retail store on a short-term rental basis. We believe our retail partners have a strong incentive to showcase our brand as our products
drive customer traffic and consistent full-price sell-through in their stores.
 

5
 

 
Broaden
Our Product Offerings
 
Continuing
to enhance and expand our product offerings represents a meaningful growth driver for Perfect Moment. We expect that expanding our product
lines will allow us to strengthen brand loyalty with the existing Perfect Moment customer base, drive higher penetration in our existing
markets and expand our appeal across new geographies. We intend to continue developing our offering through the following strategies:
 
Elevate
Fall and Winter. Perfect Moment will continue to focus on quality materials and distinctive designs in order to create luxury products
which aim to deliver technical performance and style impact. However, believing that people want to bring the functionality of our ski
apparel into their everyday lives, Perfect Moment is broadening the product range beyond the core “on-slope” skiwear to encompass
less technical lifestyle products and a wide range of exceptional products for any occasion, including all year-round accessories.
 
Expand
Spring and Summer. We intend to continue building our successful spring and summer collections in categories such as surfwear, activewear,
loungewear and swimwear. We believe offering inspiring new and complementary product categories that are consistent with our values of
heritage, functionality and quality and can become part of our core business represents an opportunity to develop a closer relationship
with our customers and expand our addressable market.
 
We
believe this strategy will deliver a number of benefits:
 


 
●
Increased
    Revenues. We expect that cross-over into adjacent product markets will increase sales by allowing us to sell outerwear, lifestyle
    products, activewear and swimwear to non-skiers and cross-sell lifestyle and “off-slope” products to existing skiwear
    customers in a winter setting.

 
 
 

 
●
Reduced
    Seasonality. We expect that sales of new lifestyle products as well as activewear and swimwear products will be less concentrated
    in the winter months and increase revenue from new and existing customers as we grow brand awareness.

 
 
 

  
●
Improved
    Margins. We believe that our margins will be improved by this strategy as modest price increases across the existing range increase
    margins dollar for dollar. A greater use of high-margin luxury materials such as cashmere will support price and margin increases,
    while a move towards more less technically-complex lifestyle pieces will also drive margin improvement. Full price sales with limited
    promotional activity will further improve margins.

 
During
the fiscal year ended March 31, 2024, we restructured and invested in our design, product development, merchandizing and production teams
to create a pathway to execute this underpinning strategy. We will launch our first spring / summer capsule encapsulating our new strategy
at the end of Q1 FY25. We plan to then gradually increase our product offering as we evaluate demand, supply and profitability.
 
Establish
Perfect Moment Owned Physical Retail
 
Perfect
Moment has grown to date without owning a physical stand-alone store. Sales growth has been driven by our online offering and wholesale
network. As part of our growth strategy, we believe opening directly operated stores in strategically selected major cities and pop-up
stores in strategic ski resorts and high-traffic city locations would provide an excellent opportunity to generate sales in key locations,
providing a luxury in-store experience, reflecting the character of the brand and providing an experiential contact point for customers.
 
As
our product range expands, we see the potential to further grow our community with a physical presence by opening directly operated stores.
We already have a physical presence in department stores, operated under wholesale arrangements. Operating Perfect Moment owned stores
would provide our community a home for the brand and act as a beacon for new or potential customers, but they also add extra complexity
and risk. In order to test our retail model, we plan to first establish pop-up locations. We are exploring options in London for an initial
pop-up location. We tested a shop-in-shop location in Los Angeles that opened in November 2023 thru to February 2024 at Fred Segal in
West Hollywood. Shop-in-shop locations are dedicated spaces within another company’s retail store on a short-term rental basis.
We expect that our experience with such temporary spaces would help us develop our strategy for all-year-round stores, including location,
size, capital expenditure need, as well as the financial and operating impact. The success of the Fred Segal pop-up transitioned them
into a new physical wholesale account. Operating temporary spaces would also provide our management team experience with opening and
operating retail stores. We evaluate each potential store location based on lease availability and projected viability, and plan to open
pop-ups in the fiscal year ending March 31, 2025 and if the learnings from the pop-ups are favorable we would plan to open year-round
stores beginning the fiscal year ending March 31, 2027.
 

6
 

 
Other
Strategies to Improve Margin
 
We
intend to focus on the following other strategies to improve our margin:
 


 
●
Shift
    towards direct-to-consumer revenue (such as ecommerce and physical retail). We expect that rebalancing from wholesale to
    direct to consumer, coupled with the other margin initiatives would result in a double-digit percentage point improvement in our
    gross margin, due to channel mix, over time.

 
 
 

  
●
Reducing
    product range within skiwear. We believe the current range offers too much choice, and yields poorer margins, resulting from
    a lack of economies of scale and higher levels of markdown and discounts.

 
 
 

  
●
Review
    and modify supplier base. We are expecting our supplier base to evolve as we source fabrics and trims more efficiently and introduce
    new finished good suppliers with better commercial terms (such as lower labor costs or better duty rates due to factories being based
    in the EU, UK, or Vietnam).

 
 
 

  
●
Review
    and revise price positioning. We will continue reviewing our selling prices. We are expecting to introduce better discipline
    and processes to assess price positioning with a focus on margin by each product, country of manufacture and country of selling.
    We expect to raise selling prices to improve the gross margin over time as part of the range development process and will
    monitor price elasticity. We believe prices are relatively in-elastic for our industry and our customer segment, and that pricing
    increases are generally expected by customers annually for luxury goods.

 
 
 

  
●
Focusing
    on reducing costs relating to crossing borders. Operating a global business requires crossing borders with products resulting
    in high costs for freight, duty, couriers and other handling costs. Perfect Moment has grown very quickly and as a result has not
    been able to focus on crossing borders in a cost-effective way. We are focused on reducing these costs and expect to see savings
    over time in freight (for example by using less air freight and more sea freight), lowering duty costs (for example moving production
    to countries with lower tariffs) and reducing broker fees through better processes.

 
Our
Brand
 
Over
the last 39 years, the Perfect Moment brand has grown from our predecessor, a small business founded by Thierry Donard, making apparel
for his team of free-ride skiers and surfers, into a global brand by building on our strength of creating luxurious, distinctively designed
and functional ski outfits. We have leveraged this strength to expand our brand into multiple seasons and new categories beyond skiwear.
With the same discipline, we have also expanded our revenue channels beyond distributors to include a select group of luxury multichannel
retailers, as well as our own DTC channel.
 
Our
Products
 
We
approach product design with our customer in mind by designing products that solve their unique needs. We are inspired by free spirits
as well as free riders – trailblazers who might not come close to a ski run. We are for anyone who is unafraid to stand out –
with the fashion they wear and the moments they make. We are still all about that perfect moment. But it could happen on and off the
slopes. Our product truths are standout styles for moment makers, flattering silhouettes for living in the moment, comfortable cuts for
moving in the moment and high-performing materials that make the moment last. We are constantly challenging ourselves to create the highest
quality and most innovative fabrications, styles and product features for our customers. Our apparel is comfortable, durable, functional
and stylish, all at an affordable luxury price point.
 

7
 

 
Our
Heritage
 
The
adventure started in the mountains of Chamonix in 1984, with the Perfect Moment brand a vision of famed extreme sports filmmaker and
professional skier Thierry Donard, who designed apparel for his team of expert freeride skiers and surfers for his film production company
La Nuite de la Glisse. Donard used his personal experience to create designs that were characterized by quality, style and performance,
and focused on the ultimate goal of every athlete: to experience the “perfect moment”. Thierry Donard continues to be a stockholder
in Perfect Moment and, in the past, we have provided product placements for his films.
 
Our
Evolution
 
Our
product offerings have evolved significantly since the days of solely making specialty ski and surfwear for extreme sports. Today, we
continue to draw on our rich heritage of performance garments and statement designs. Retro-inspired vivid and bold color palates complement
the industry’s leading technical fabrics to deliver fashion, form, function and fun for women, men and children. Primarily known
for our on-and-off the slopes skiwear, in 2016 PMA developed a summer range inspired by the island of Ibiza to bring its unique style
to swimwear and activewear.
 
Beyond
Sport
 
Recognizing
our customers want to bring the functionality of our clothing into their everyday lives, we expanded our product offerings to include
products for outdoor enthusiasts, urban explorers and discerning consumers everywhere. The uncompromised craftsmanship and quality of
the Perfect Moment brand is preserved in new products and high-performance materials to keep our customers warm and comfortable no matter
how low the temperature drops. As we evolved and expanded our winter assortment to suit new uses, climates and geographies, we also refreshed
our core offerings with the introduction of our sustainable swimwear collection and enhancing our classic products with a focus on elevated
style, luxurious fabrics and refined fits.
 
Beyond
Outerwear
 
Perfect
Moment has launched a refined line of accessories in response to customer demand for products to complement their skiwear, outerwear
or swimwear. Our accessories focus on handwear, headwear, neckwear and everything the customer needs for a day of fun and adventure on
the mountain, near the sea or in the city; offering unparalleled fit, function and timeless style to our customers, consistent with the
heritage of our core products. Beyond accessories, we continue to selectively respond to customer demand for new product categories.
Our customers have shown meaningful interest in key new product categories including travel gear, which we may pursue in the future.
 
As
we expand the Perfect Moment brand to serve new uses, wearing occasions, geographies and consumers, we will always stay true to who we
are and what the Perfect Moment brand stands for: authentic heritage, uncompromised craftsmanship and quality, exceptional style and
superior functionality.
 
Our
Marketing Strategy
 
Brand
Awareness and Engagement
 
We
believe the nature of skiing as a largely affluent, international pursuit means there is a large opportunity in aspirational, lifestyle-led
social media engagement. We have utilized social media to publicize our brand with celebrities, influencers, top-tier editorial, collaborations
and luxury locations to create a distinct, fun and engaging aspirational lifestyle narrative. Perfect Moment expects to continue its
approach to social media, building its follower base through a similar approach with an evolving mix of celebrities, influencers, editorials
and locations. Beyond social media, we believe Perfect Moment has been able to deploy the same core brand proposition and narrative to
direct digital marketing and traditional media, elevating brand profile and driving high levels of engagement simultaneously.
 

8
 

 
Consumer
Acquisition
 
We
principally acquire consumers through online channels, including paid and organic search, metasearch, affiliate partnerships, display
advertising and social media channels. We have access to channel experts who work with dedicated analysts, data scientists and engineers
and have invested resources to optimize paid search, developing programs and algorithms to maximize our return on paid search.
 
Retention
and Loyalty
 
We
focus on building continuous dialogue with our consumers given their levels of engagement with luxury shopping. We do this by creating
content and developing tailored product recommendations, which we distribute via email, social media, display advertising and directly
on our platform. We believe our strategy generates a significant return on new customer acquisition investments resulting from high average
order value, strong product margins and attractive repeat purchase behavior.
 
Investing
for the Future
 
Moving
forward, our marketing focus is on continuing to tell our stories in unique, creative and authentic ways that engage customers. As our
distribution model has shifted from pure wholesale to multi-channel, our business needs have evolved. We have supported this shift through
a blend of brand and performance marketing that reaches a global audience while maintaining a consistent and authentic brand experience.
We will continue to strategically invest in reaching new audiences across platforms in developing audiences, markets and boosting affinity
around the world.
 
Product
Development and Innovation
 
Uncompromised
craftsmanship begins with sourcing the right raw materials. We use premium fabrics and finishings for performance, comfort and longevity.
Our blends of down and fabrics enable us to create warmer, lighter and more durable products across seasons and applications.
 
Our
insulated products are made with down because it is recognized as the world’s best natural insulator, providing approximately three
times the warmth per ounce as synthetic alternatives. We are committed to the sustainable and ethical sourcing of our raw materials.
We only use down that is a by-product of the poultry industry and we only purchase down and fur from suppliers who adhere to our stringent
standards regarding fair practices and humane treatment of animals.
 
Our
Global End-To-End Operations
 
Our
core operations areas are supply chain management, fulfilment and premium customer service.
 
Supply
Change Management
 
We
have built a supply chain that is scalable for our business and through which we control the design and development of our products.
 
Design,
Innovation and Manufacturing
 
We
have a diversified and flexible supply chain that leverages third-party suppliers and manufacturers to produce our raw materials and
finished products. We directly and actively manage every step of our product development and production process. The extent to which
we manage production is differentiated from a model of primarily relying on third-party agents to manage production. We believe our approach
has enabled us to produce luxury products through greater control of the end-to-end production process.
 
We
purchase our finished products from our manufacturers on a purchase order basis and do not have any long-term agreements requiring us
to use any supplier or manufacturer. We have long-standing relationships with our vendors, which are strengthened by the consistency
and longevity of our core fabric and core style profile.
 

9
 

 
We
regularly source new suppliers and manufacturers to support our ongoing innovation and growth, and we carefully evaluate all new suppliers
and manufacturers to ensure they share our standards for quality of manufacturing, ethical working conditions and social and environmental
sustainability practices.
 
Digital
Production
 
Our
content creation process includes styling, photographing, photo-editing and content management and allows us to achieve a luxury product
presentation with a consistent look and feel. Our third-party studios are the heart of the process, where teams of professional stylists,
models and photographers create product images under the leadership and control of our marketing and creative experts. We also develop
original content, including tailored merchandise descriptions, convenient size and fit information and detailed measurements information
to provide the best consumer experience, maximize revenue and minimize returns.
 
Warehouse
and Fulfilment
 
We
ship our finished products to our business-to-business (“B2B”) and business-to-consumer (“B2C”) customers globally.
We distribute our B2C products from our fulfilment center located in the United Kingdom, where we have created a warehouse-within-a-warehouse
model at our third-party logistics provider’s site. We regularly evaluate our distribution infrastructure and capacity to ensure
that we are able to meet our anticipated needs and support our continued growth.
 
Premium
Customer Service
 
We
provide high-quality customer service throughout the consumer experience, from purchase to returns, offering advice on size and fit,
styling recommendations, responding to customer feedback and managing return and exchange requests. We localize aspects of the consumer
journey for convenience, such as offering different languages and payment methods through customer care.
 
Competition
 
We
operate in a competitive industry, and consumers have the option to purchase both online and offline, through our partners. While we
believe that we do not have any direct competition, we have indirect competitors in two primary categories, skiwear brands and outerwear
brands.
 
Skiwear
Brands – Perfect Moment’s affordable-luxury products are characterized by quality, style and performance where retro-inspired
vivid and bold color palates complement the industry’s leading technical fabrics to deliver fashion, form, function and fun for
women, men and children. Most other competitors in skiwear skew to either fashion or pure performance. Additionally, Perfect Moment’s
Kids-wear range addresses an overlooked premium segment.
 
Outerwear
Brands – The market for outerwear is highly fragmented. We principally operate in the market for premium outerwear, which is
part of the broader apparel industry. We compete directly against other manufacturers, wholesalers and direct retailers of outerwear,
premium functional outerwear and luxury outerwear. We compete both with global brands and with regional brands operating only in select
markets. Because of the fragmented nature of our marketplace, we also compete with other apparel sellers, including those who do not
specialize in outerwear. While we operate in a highly competitive market, we believe there are many factors that differentiate us from
other manufacturers, wholesalers and retailers of outerwear, including our brand, our heritage and history, our focus on functionality
and craftsmanship and the fact that our core products are cross functional and can be used for different purposes for example on the
slope and in the city.
 
Activewear
Brands – Competition in the athletic apparel industry is principally on the basis of brand image and recognition as well as
product quality, innovation, style, distribution and price. We believe that we successfully compete based on our luxury brand image,
our focus on women and our technical product innovation. We are also differentiated by our range of surfwear which similar to our skiwear
are characterized by quality, style and performance while most other competitors in surfwear are mainly focused on performance.
 

10
 

 
Technology
 
Technology
is at the core of our business strategy, powering our operational capabilities and the sustainable scalability of our platform. We believe
that continuous investment in our technology has given us a competitive advantage and enabled fast innovation. Our technology platform
with MACH architecture is designed to provide Perfect Moment with longer term ease of integration, stability, performance, and scalability
based on three main components:
 


 
(1)
Service
    Oriented Architecture facilitates design and maintenance of partner integrations:

 


 
●
Key
    enabler of omni-channel

 
 
 

  
●
Able
    to cater to evolving business needs

 
 
 

  
●
Decreases
    Total Cost of Ownership and increases efficiency

 


 
(2)
Cloud-focused
    strategy designed to:

 


 
●
Improve
    scalability and cost efficiency

 
 
 

  
●
Allow
    for better accessibility and performance in markets around the worlds

 


 
(3)
Headless
    Architecture allows:

 


 
●
Rapid
    build of differentiating user experience without impact to the backend systems

 
 
 

  
●
Innovative
    new user experiences build on headless building blocks

 
 
 

  
●
Evolution
    of front-end over time to take advantage of new technologies and innovations

 
Trademarks
and Other Intellectual Property
 
We
protect our intellectual property through a combination of trademarks, domain names, copyrights, design rights/design patents and trade
secrets, as well as contractual provisions and restrictions on access to our proprietary technology related to our ecommerce platform.
Our principal trademark assets include the trademark “Perfect Moment,” which is registered in the United States and targeted
foreign jurisdictions, as our logos and taglines. We have applied to register or registered many of our trademarks in the United States
and other jurisdictions in all classes relevant to our business, and we will pursue additional trademark registrations to the extent
we believe they would be beneficial and cost-effective. We actively oppose and defend our position on the trademark registers and subscribe
to a trademark watching service for our key assets. Further we subscribe to an online monitoring system to search for infringements of
our intellectual property rights and, in addition, act on any reported to us by customers or employees.
 
We
are the registered holder of multiple domestic and international domain names that include “perfect moment” and similar variations.
We also hold domain registrations for many of our product names and other related trade names and slogans. We own or have control over
relevant social media handles which contain our key assets. In addition to the protection provided by our intellectual property rights,
we enter into confidentiality and proprietary rights agreements with our employees, consultants, contractors and business partners. Where
appropriate we enter into relevant license agreements to allow others to use our Intellectual Property or where we need permission to
use Intellectual Property of third parties. We further control the use of our proprietary technology and intellectual property through
provisions in both our customer terms of use on our website and the terms and conditions governing our agreements with other third parties.
 

11
 

 
Government
Regulation
 
In
the United States and the United Kingdom and in the other jurisdictions in which we operate, we are subject to labor and employment laws,
laws governing advertising, privacy and data security laws, safety regulations and other laws, including consumer protection regulations
that apply to retailers and/or the promotion and sale of merchandise and the operation of stores and warehouse facilities. Our products
sold outside of the United Kingdom are subject to tariffs, treaties and various trade agreements as well as laws affecting the importation
of consumer goods. We monitor changes in these laws, regulations, treaties and agreements, and believe that we are in material compliance
with applicable laws.
 
Licenses,
Certificates and Approvals
 
The Company
has obtained all licenses, certificates and approvals required for carrying on its business activities during the two fiscal years ended
March 31, 2024 and March 31, 2023.
 
Employees
and Human Capital Resources
 
As
of March 31, 2024 and 2023, we had a total of 39 and 31 full-time employees, respectively, as well as a limited number of temporary employees
and consultants. None of our employees are unionized or covered by collective bargaining agreements, and we consider our current employee
relations to be good.
 
ITEM
1A. RISK FACTORS
 
Investing
in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together
with all of the other information contained in this Annual Report, including the section titled “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes
thereto, before making a decision to invest in our common stock. These risks and uncertainties are not the only ones we face. Additional
risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that
affect us. If any of the following risks occur, our business, financial condition, results of operations and prospects could be materially
and adversely affected. In that event, the price of our common stock could decline, and you could lose part or all of your investment.
You should not interpret our disclosure of any of the following risks to imply that such risks have not already materialized.
 
Risk
Factors Summary
 
Our
business is subject to numerous risks and uncertainties. These risks include, but are not limited to, the following:
 


 
●
Our
    history of losses and the substantial doubt about our ability to continue as a going concern, which could cause our stockholders
    to lose some or all of their investment in us.

 
 
 

 
●
Our
    business depends on our strong brand, and if we are not able to maintain and enhance our brand we may be unable to sell our products,
    which would adversely affect our business. 

 
 
 

 
●
Our
    business partially depends on our wholesale partners, and our failure to maintain and further develop our relationships with our
    wholesale partners could harm our business.

 
 
 

 
●
A
    downturn in the global economy will likely affect customer purchases of discretionary items, which could materially harm our sales,
    profitability and financial condition.

 
 
 

 
●
Our
    financial performance is subject to significant seasonality and variability, which could significantly impact our cash flow and cause
    the price of our common stock to decline.

 
 
 

 
●
We
    currently do not operate Perfect Moment owned physical retail stores. Our plans to open Perfect Moment owned physical retail stores
    are dependent on a variety of factors, including store locations being available for lease and the stores being economically viable
    to operate.

 

12
 

 


 
●
Our
    limited operating experience and limited brand recognition in new international markets may limit our expansion and cause our business
    and growth to suffer.

 
 
 

 
●
Our
    success is substantially dependent on the service of certain members of our board of directors and senior management.

 
 
 

 
●
We
    may rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements
    we may have. In the future, funds may not be available to fund operations or for other use outside of Hong Kong, due to interventions
    in, or the imposition of restrictions and limitations on, our ability or our Hong Kong subsidiary by the PRC government to transfer
    cash. Any limitation on the ability of our Hong Kong subsidiary to make payments to us could have a material adverse effect on our
    ability to conduct our business and might materially decrease the value of our common stock.

 
 
 

 
●
    
Recently,
    the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in mainland
    China with little or no advance notice. In the future, we may be subject to PRC laws and regulations related to the current business
    operations of our Hong Kong operating subsidiary and any changes in such laws and regulations and interpretations may impair its
    ability to operate profitably, which could result in a material negative impact on its operations and/or the value of the securities
    we are registering for sale. 

 
 
 

 
●
The
                                            fluctuating cost of raw materials could increase our cost of goods sold and cause our results
                                            of operations and financial condition to suffer.
 

 
●
Our
                                            business is reliant on a limited number of third-party manufacturers and raw material suppliers.
 

 
●
Our
    ability to deliver our products to the market and to meet customer expectations could be harmed if we encounter problems with our
    distribution system.

 
 
 

 
●
It
    may be difficult for overseas shareholders and/or regulators to conduct investigations or collect evidence within the territory of
    China, including Hong Kong. 

 
 
 

 
●
Data
    security breaches and other cyber security events could result in disruption to our operations or financial losses and could negatively
    affect our reputation, credibility and business. 

 
 
 

 
●
The
    PRC laws and regulations and the enforcement of such that apply or are to be applied to Hong Kong can change quickly with little
    or no advance notice. As a result, the Hong Kong legal system embodies uncertainties which could limit the availability of legal
    protections, which could result in a material change in PMA’s operations and/or the value of the securities we are registering
    for sale.

 
 
 

 
●
Our
    fabrics and manufacturing technology generally are not patented and can be imitated by our competitors. If our competitors sell products
    similar to ours at lower prices, our net revenue and profitability could suffer.

 
 
 

 
●
Our
    share price may be volatile, and you may be unable to sell your shares at or above the price at which you purchased them.

 
Risks
Related to Our Business, Our Brand, Our Products and Our Industry
 
We
have a history of losses, expect to continue to incur losses in the near term and may not achieve or sustain profitability in the future,
and as a result, our management has identified and our auditors reported that there is a substantial doubt about our ability to continue
as a going concern.
 
For
the fiscal years ended March 31, 2024 and 2023, our operating loss was $7,675 and $8,625, respectively. We intend to rely on debt and
equity financing for working capital until positive cash flows from operations can be achieved, which may never occur. These matters
raise substantial doubt about our ability to continue as a going concern. On February 12, 2024, we consummated the initial public offering
of our common stock for aggregate net proceeds of $6,009, after deducting underwriting discounts and commissions and estimated offering
expenses. Based upon our current operating plan and assumptions, we expect that the net proceeds from the initial public offering and
our existing cash balances and expected cash flows from operations, alongside the continuance of our existing financing arrangements,
and the automatic conversion of the outstanding balance of the Notes upon the closing of the initial public offering will be sufficient
to fund our operations for at least the next 12 months, excluding financing to support production (i.e. timing of working capital).
However, our operating plan may change, and our assumptions may prove to be wrong, as a result of many factors currently unknown
to us, and we could use our available capital resources sooner than we expect. We may need to seek additional funds sooner than planned,
through public or private equity or debt financings or other third-party funding or a combination of these approaches. Even if we believe
we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable
or based upon specific strategic considerations.
 

13
 

 
Any
additional capital-raising efforts may divert our management’s attention from the operation of our business. In addition, we cannot
guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. If we are unable to
obtain sufficient amounts of additional capital, when and if we require it, we may be required to reduce the scope of our operations,
which could harm our business, financial condition and results of operations. Our consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
 
The
report of our independent registered public accounting firm that accompanies our audited consolidated financial statements for the fiscal
years ended March 31, 2024 and March 31, 2023 contains a going concern explanatory paragraph in which such firm stated that there is
substantial doubt about our ability to continue as a going concern. Our consolidated financial statements contained in this report do
not include any adjustments that might result if we are unable to continue as a going concern. If we are unable to continue as a going
concern, holders of our securities might lose their entire investment. Although based upon our current operating plan and assumptions,
we expect that the net proceeds from our initial public offering and our existing cash balances and expected cash flows from operations,
alongside the continuance of our existing financing arrangements, and the automatic conversion of the outstanding balance of the Notes
upon the closing of the initial public offering will be sufficient to fund our operations for at least the next 12 months, excluding
financing to support production (i.e. timing of working capital), the doubts raised relating to our ability to continue as a going
concern may make our shares an unattractive investment for potential investors. These factors, among others, may make it difficult to
raise any additional capital and may cause us to be unable to continue to operate our business.
 
Our
business depends on our strong brand, and if we are not able to maintain and enhance our brand we may be unable to sell our products,
which would adversely affect our business.
 
The
Perfect Moment name and brand image are integral to the growth of our business, and to the implementation of our strategies for expanding
our business. We believe that the brand image we have developed has significantly contributed to the success of our business and is critical
to maintaining and expanding our customer base. Maintaining and enhancing our brand will depend largely on the success of our marketing
and merchandising efforts and our ability to provide a consistent, high-quality product and customer experience. Maintaining and
enhancing our brand may require us to make substantial investments in areas such as product design, store openings and operations, marketing,
ecommerce, community relations and employee training, and these investments may not be successful. We anticipate that, as our
business continues to expand into new markets and new product categories and as the market becomes increasingly competitive, maintaining
and enhancing our brand may become difficult and expensive. Conversely, as we penetrate these new markets and our brand becomes more
widely available, it could potentially detract from the appeal stemming from the scarcity of our brand. Our brand may also be adversely
affected if our public image or reputation is tarnished by negative publicity. In addition, ineffective marketing, product diversion
to unauthorized distribution channels, product defects, counterfeit products, unfair labor practices, and failure to protect the intellectual
property rights in our brand are some of the potential threats to the strength of our brand, and those and other factors could rapidly
and severely diminish consumer confidence in us. Maintaining and enhancing our brand will depend largely on our ability to be a leader
in affordable luxury skiwear, outerwear and activewear and to continue to offer a range of high-quality products to our customers, which
we may not execute successfully. Any of these factors could harm our sales, profitability or financial condition. A key element of our
growth strategy is the expansion of our product offerings into new product categories. We may be unsuccessful in designing products
that meet our customers’ expectations for our brand or that are attractive to new customers. If we are unable to anticipate customer
preferences or industry changes, or if we are unable to modify our products on a timely basis or expand effectively into new product
categories, we may lose customers. As we expand into new geographic markets, consumers in these new markets may be less compelled by
our brand image and may not be willing to pay a higher price to purchase our products as compared to traditional outerwear. More generally,
our results of operations would suffer if our investments and innovations do not anticipate the needs of our customers, are not appropriately
timed with market opportunities or are not effectively brought to market.
 

14
 

 
We
continue to focus on our direct-to-consumer channel, which may be costly and could materially harm our sales, profitability and financial
condition.
 
Our
business operates on a multi-channel distribution model, which includes distributing products on a wholesale basis for resale by others
and online by us. Focusing on our ecommerce platform is essential to our future strategy. This strategy has and will continue
to require significant investment in cross-functional operations and management focus, along with investment in supporting technologies.
If we are unable to provide a convenient and consistent experience for our customers, our ability to compete and our results of operations
could be adversely affected. In addition, if our ecommerce platform does not appeal to our customers, reliably function as designed,
or maintain the privacy of customer data, or if we are unable to consistently meet our brand promise to our customers, we may experience
a loss of customer confidence or lost sales, or be exposed to fraudulent purchases, which could adversely affect our reputation and results
of operations.
 
A
downturn in the global economy will likely affect customer purchases of discretionary items, which could materially impact our sales,
profitability and financial condition.
 
Many
factors affect the level of consumer spending for discretionary items including performance luxury outerwear. These factors include general
economic conditions, interest and tax rates, the availability of consumer credit, disposable consumer income, unemployment and consumer
confidence in future economic conditions. Consumer purchases of discretionary items, such as our performance luxury outerwear, tend to
decline during recessionary periods when disposable income is lower. During our history, we have experienced recessionary periods, but
we cannot predict the effect of future recessionary periods on our sales and profitability. A downturn in the economy in markets in which
we sell our products may materially harm our sales, profitability and financial condition. If periods of decreased consumer spending
persist, our sales could decrease, and our financial condition and results of operations could be adversely affected.
 
We
operate in a highly competitive market and the size and resources of some of our competitors may allow them to compete more effectively
than we can, resulting in a loss of our market share and a decrease in our revenue and profitability.
 
The
market for premium outerwear is highly fragmented. We compete against a wide range of brands and retailers. Many of our competitors have
significant competitive advantages, including larger and broader customer bases, more established relationships with a broader set of
suppliers, greater brand recognition, greater financial resources, more established research and development processes, a longer history
of store development, greater marketing resources, more established distribution processes, and other resources which we do not have.
Our competitors may be able to achieve and maintain brand affinity and market share more quickly and effectively than we can. Many of
our competitors have more established and diversified marketing programs, including with respect to promotion of their brands through
traditional forms of advertising, such as print media and television commercials, and through celebrity endorsements, and have substantial
resources to devote to such efforts. Our competitors may also create and maintain brand affinity using traditional forms of advertising
more quickly than we can. Our competitors may also be able to increase sales in their new and existing markets faster than we can by
emphasizing different distribution channels than we can, such as catalog sales or an extensive retail network, and many of our competitors
have substantial resources to devote toward increasing sales in such ways.
 
Use
of social media and influencers may adversely affect our reputation or subject us to fines or other penalties.
 
We
use third-party social media platforms as, among other things, marketing tools. For example, we maintain Instagram, Facebook (Meta),
Pinterest and TikTok accounts. We also maintain relationships with thousands of social media influencers and engage in collaborations.
As existing ecommerce and social media platforms continue to rapidly evolve and new platforms develop, we must continue to maintain
a presence on these platforms and establish presences on new or emerging social media platforms. If we are unable to cost-effectively
use social media platforms as marketing tools or if the social media platforms we use change their policies or algorithms, we may not
be able to fully optimize such platforms, and our ability to maintain and acquire consumers and our financial condition may suffer. Furthermore,
as laws and regulations and public opinion rapidly evolve to govern the use of these platforms and devices, the failure by us, our employees,
our network of social media influencers, our sponsors or third parties acting at our direction to abide by applicable laws and regulations
in the use of these platforms and devices or otherwise could subject us to regulatory investigations, class action lawsuits, liability,
fines or other penalties and have an adverse effect on our business, financial condition, results of operations and prospects.
 

15
 

 
In
addition, an increase in the use of social media influencers for product promotion and marketing may cause an increase in the burden
on us to monitor compliance of the content they post, and increase the risk that such content could contain problematic product or marketing
claims in violation of applicable laws and regulations. For example, in some cases, the Federal Trade Commission has sought enforcement
action where an endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between
an influencer and an advertiser. We do not control the content that our influencers post, and if we were held responsible for any false,
misleading or otherwise unlawful content of their posts or their actions, we could be fined or subjected to other monetary liabilities
or forced to alter our practices, which could have an adverse impact on our business.
 
Negative
commentary regarding us, our products or influencers and other third parties who are affiliated with us may also be posted on social
media platforms and may be adverse to our reputation or business. Influencers with whom we maintain relationships could engage in behavior
or use their platforms to communicate directly with our consumers in a manner that reflects poorly on our brand and may be attributed
to us or otherwise adversely affect us. It is not possible to prevent such behavior, and the precautions we take to detect this activity
may not be effective in all cases. Our target consumers often value readily available information and often act on such information without
further investigation and without regard to its accuracy. The harm may be immediate, without affording us an opportunity for redress
or correction.
 
Our
current and future products may experience quality problems from time to time that can result in negative publicity, litigation, product
recalls and warranty claims, which could result in decreased revenue and operating margin, and harm to our brand.
 
We
have occasionally received, and may in the future receive, shipments of products that fail to comply with our technical specifications
or that fail to conform to our quality control standards. We have also received, and may in the future receive, products that are otherwise
unacceptable to us or our customers. Under these circumstances, unless we are able to obtain replacement products in a timely manner,
we risk the loss of revenue resulting from the inability to sell those products and related increased administrative and shipping costs.
Additionally, if the unacceptability of our products is not discovered until after such products are sold, our customers could lose confidence
in our products or we could face a product recall and our results of operations could suffer and our business, reputation, and brand
could be harmed. There can be no assurance we will be able to detect, prevent, or fix all defects that may affect our products. Failure
to detect, prevent, or fix defects, or the occurrence of real or perceived quality, health or safety problems or material defects in
our current and future products, could result in a variety of consequences, including a greater number of product returns than expected
from customers and our wholesale partners, litigation, product recalls, and credit, warranty or other claims, among others, which could
harm our brand, sales, profitability and financial condition. Each Perfect Moment clothing product has a warranty against defects with
reasonable use, for the expected lifetime of the product. Because of this comprehensive warranty, quality problems could lead to increased
warranty costs, and divert the attention of our manufacturing facilities. Such problems could hurt our luxury brand image, which is critical
to maintaining and expanding our business. Any negative publicity or lawsuits filed against us related to the perceived quality and safety
of our products could harm our brand and decrease demand for our products.
 

16
 

 
If
we are unable to manage our operations at our current size or to manage any future growth effectively, our growth may be slowed.
 
We
have expanded our operations for many years and plan to continue our expansion efforts. In order to support growth, of which there can
be no assurance, we will be required to continue to expand our sales and marketing, product development, manufacturing and distribution
functions, to upgrade our management information systems and other processes, and to obtain more space for our expanding administrative
support and other personnel. Continued or fluctuating growth could strain our resources, and we could experience operating difficulties,
including difficulties in hiring, training and managing an increasing number of employees and manufacturing capacity to produce our products,
and delays in production and shipments. These difficulties may result in the erosion of our brand image, divert the attention of management
and key employees and impact financial and results of operations. In order to continue to expand our direct-to-consumer channel, we expect
to add selling, general and administrative expenses to our cost base. These costs, which include capital assets, lease commitments and
headcount, could result in decreased margins if we are unable to drive commensurate direct-to-consumer revenue growth.
 
Our
financial performance is subject to significant seasonality and variability, which could cause the price of our common stock to decline.
 
Our
business is affected by a number of factors common to our industry and by other factors specific to our business model, which drive seasonality
and variability. Historically, key metrics, including those related to our growth, profitability and financial condition, have fluctuated
significantly across fiscal periods. Consumer purchases of Women, Men and Kids skiwear and outerwear, which are the Perfect Moment core
categories, are concentrated in the Fall/Winter season. As a result, a large proportion of our direct-to-consumer revenue is recognized
in the third and fourth fiscal quarter. Our wholesale revenue is weighted earlier in the second and third fiscal quarters, when most
orders are shipped to wholesale partners. At the consolidated level, our net revenue is concentrated in the second, third and fourth
fiscal quarters, while our operating costs are more evenly distributed throughout the year. In the fiscal year ended March 31, 2024,
the second, third and fourth fiscal quarters represented 96% of total net revenue. Working capital requirements typically increase throughout
the first, second and early third quarters as overheads continue to be incurred and inventory builds to support our peak shipping and
selling periods in the second and third quarters. Cash provided by operating activities is typically highest in the fourth quarter following
the significant inflows associated with our peak selling season. Historical results, especially comparisons across fiscal quarters, should
not be considered indicative of the results to be expected for any future periods. In addition to the seasonality of demand for our products,
our financial performance is influenced by a number of factors which are difficult to predict and variable in nature. These include input
cost volatility, the timing of consumer purchases and wholesale deliveries which very often shift between fiscal quarters, demand forecast
accuracy, inventory availability and the evolution of our channel mix, as well as external trends in weather and discretionary consumer
spending. A number of other factors which are difficult to predict could also affect the seasonality or variability of our financial
performance. Therefore, you should not rely on the results of a single fiscal quarter as an indication of our annual results or future
performance.
 
Our
sales and profitability may decline as a result of increasing product costs and decreasing selling prices.
 
Our
business is subject to significant pressure on costs and pricing caused by many factors, including intense competition, constrained sourcing
capacity and related inflationary pressure, pressure from consumers to reduce the prices we charge for our products, and changes in consumer
demand. These factors may cause us to experience increased costs, reduce our prices to consumers or experience reduced sales in response
to increased prices, any of which could cause our operating margin to decline if we are unable to offset these factors with reductions
in operating costs and could have a material adverse effect on our financial condition, results of operations and cash flows.
 
Our
success depends on our ability to identify and originate product trends as well as to anticipate and react to changing consumer demands
in a timely manner.
 
All
of our products are subject to changing consumer preferences that cannot be predicted with certainty. If we are unable to introduce new
products or novel technologies in a timely manner or our new products or technologies are not accepted by our customers, our competitors
may introduce similar products in a timelier fashion, which could hurt our goal to be viewed as a leader in affordable luxury skiwear
and activewear. Our new products may not receive consumer acceptance as consumer preferences could shift rapidly to different types of
athletic apparel or away from these types of products altogether, and our future success depends in part on our ability to anticipate
and respond to these changes. If we are unable to anticipate consumer preferences and successfully develop and introduce new, innovative,
and differentiated products, we may not be able to maintain or increase our sales and profitability. Even if we are successful in anticipating
consumer preferences, our ability to adequately react to and address those preferences will in part depend upon our continued ability
to develop and introduce innovative, high-quality products. Our failure to effectively introduce new products that are accepted by consumers
could result in a decrease in net revenue and excess inventory levels, which could have a material adverse effect on our financial condition.
 

17
 

 
Our
business and results of operations could be materially harmed if we are unable to accurately forecast customer demand for our products.
 
Our
ability to forecast accurately has become increasingly important as we have expanded our direct-to-consumer channel globally and could
be affected by many factors outside of our control, including an increase or decrease in consumer demand for our products or for products
of our competitors, our failure to accurately forecast consumer acceptance of new products, product introductions by competitors, unanticipated
changes in general market conditions and, therefore, consumer spending in the sector and weakening of economic conditions or consumer
confidence in future economic conditions. In our wholesale channel, a majority of orders delivered in a given fiscal year are received
in the prior fiscal year, enabling us to manufacture inventory relative to a defined order book. In the direct-to-consumer channel, we
manufacture according to our forecasts of consumer demand. If we overestimate the demand for our products, we could face inventory levels
in excess of demand, which could result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices,
which would harm our gross margins and our brand management efforts. The impact of overestimation is expected to increase as a larger
portion of our sales comes through our direct-to-consumer channel, and as we expand our product offerings. If we underestimate the demand
for our products, we may not be able to produce products to meet our wholesale partner requirements, and this could result in delays
in the shipment of our products and our failure to satisfy demand, as well as damage to our reputation and wholesale partner relationships.
Overall, failures to accurately predict the level of demand for our products could harm our profitability and financial condition.
 
Our
plans to improve and expand our product offerings may not be successful, and implementation of these plans may divert our operational,
managerial and administrative resources, which could harm our competitive position and reduce our net revenue and profitability.
 
In
addition to our global expansion plans, we are growing our business by expanding our product offerings outside performance luxury outerwear,
including an expanded winter and summer collection, knitwear, activewear and accessories. The principal risks to our ability to successfully
carry out our plans to expand our product offering include:
 


 
●
the
    success of new products and new product lines will depend on market demand and there is a risk that new products and new product
    lines will not deliver expected results, which could negatively impact our future sales and results of operations;

 
 
 

  
●
if
    our expanded product offerings fail to maintain and enhance our distinctive brand identity, our brand image may be diminished and
    our sales may decrease;

 
 
 

  
●
implementation
    of these plans may divert management’s attention from other aspects of our business and place a strain on our management, operational
    and financial resources, as well as our information systems; and

 
 
 

  
●
incorporation
    of novel materials or features into our products may not be accepted by our customers or may be considered inferior to similar products
    offered by our competitors.

 
We
also may fail to create adequate brand awareness around new product offerings. In addition, our ability to successfully carry out our
plans to expand our product offerings may be affected by economic and competitive conditions, changes in consumer spending patterns and
changes in consumer preferences and styles. These plans could be abandoned, could cost more than anticipated and could divert resources
from other areas of our business, any of which could negatively impact our competitive position and reduce our net revenue and profitability.
 

18
 

 
We
currently do not operate Perfect Moment owned physical retail stores. Our plans to open Perfect Moment owned physical retail stores are
dependent on a variety of factors, including store locations being available for lease and the stores being economically viable to operate.
 
One
of our growth strategies is to own and operate Perfect Moment owned physical retail stores. Our revenue and profit forecasts beginning
with fiscal year ending March 31, 2027 include the opening of directly operated retail stores that will need to be leased, staffed, replenished
with inventory and operated profitably. In addition, the stores will need to be furnished with the appropriate fittings. As this will
be a new selling channel for Perfect Moment, sourcing locations introduces the risk that leases might not be available or be more expensive
than our estimates. The initial capital expenditure and ongoing costs and complexities of operating a store, such as staffing and energy
costs, could be higher than our forecasts, leading to lower profitability or losses. Brands often see a halo impact on their other revenue
channels (for example, online channels) when operating physical stores. However, there is a risk that new stores will cannibalize sales
from these channels, which could harm our future business and results of operations.
 
Our
limited operating experience and limited brand recognition in new international markets may limit our expansion and cause our business
and growth to suffer.
 
Our
future growth partially depends on our geographical expansion, starting with establishing a presence in China. We have limited experience
with regulatory environments and market practices internationally, and we may not be able to penetrate or successfully operate in any
new market. In connection with our expansion efforts we may encounter obstacles we did not face in our current markets, including cultural
and linguistic differences, differences in regulatory environments, labor practices and market practices, difficulties in keeping abreast
of market, business and technical developments, and foreign customer tastes and preferences. We may also encounter difficulty expanding
into new international markets because of limited brand recognition leading to delayed acceptance of our luxury products by customers
in these new international markets. Our failure to develop our business in new international markets or disappointing growth outside
of existing markets could harm our future business and results of operations.
 
If
we fail to attract new customers, we may not be able to increase sales.
 
Our
success depends, in part, on our ability to attract new customers. In order to expand our customer base, we must appeal to and attract
consumers who identify with our brand and products. We have made significant investments in enhancing our brand and attracting new customers.
We expect to continue to make significant investments to promote our current products to new customers and new products to current and
new customers, including through our ecommerce platform. Such marketing investments can be expensive and may not result in increased
sales. Further, as our brand becomes more widely known, we may not attract new customers as we have in the past. If we are unable to
attract new customers, we may not be able to increase our sales.
 
We
partially depend on our wholesale partners to display and present our products to customers in their wholesale channel, and our failure
to maintain and further develop our relationships with our wholesale partners could harm our business.
 
We
sell our products in our wholesale channel either directly or indirectly, through distributors and to wholesale partners. Our wholesale
partners service customers by stocking and displaying our products and explaining our product attributes. Our relationships with these
partners are important to the authenticity of our brand and the marketing programs we continue to deploy. Our failure to maintain these
relationships with our wholesale partners or financial difficulties experienced by these wholesale partners could harm our business.
Our sales depend, in part, on wholesale partners effectively displaying our products, including providing attractive space in their online
or physical stores or marketing campaigns, including shop-in-shops, and training their sales personnel to sell our products. If our wholesale
partners reduce or terminate those activities, we may experience reduced sales of our products, resulting in lower revenue and gross
margins, which would harm our profitability and financial condition. If we lose any of our wholesale partners, or if they reduce their
purchases of our existing or new products, or their number of stores or operations are reduced, or they promote products of our competitors
over ours, or they suffer financial difficulty or insolvency, our sales would be harmed. The recent decline in the overall retail sector,
including ongoing disruptions related to COVID-19, has been challenging for our wholesale partners. Such conditions, among other things,
have resulted, and in the future may result, in financial difficulties leading to restructurings, bankruptcies, liquidations and other
unfavorable events for our wholesale partners and may cause such partners to reduce or discontinue orders of our products or be unable
to pay us for products they have purchased from us. This has caused us to negotiate shortened payment terms and reduce credit limits
in certain cases. If the overall retail environment continues to decline or if one or more of our wholesale partners is unable or unwilling
to meet our payment terms, our business and results of operations could be harmed.
 

19
 

 
We
rely on payment cards to receive payments and are subject to payment-related risks.
 
For
our direct-to-consumer sales, we accept a variety of payment methods, including credit cards, debit cards and mobile payment methods.
Accordingly, we are, and will continue to be, subject to significant and evolving regulations and compliance requirements relating to
payment card processing. This includes laws governing the collection, processing and storage of sensitive consumer information, as well
as industry requirements such as the Payment Card Industry Data Security Standard (“PCI-DSS”). These laws and obligations
may require us to implement enhanced authentication and payment processes that could result in increased costs and liability and reduce
the ease of use of certain payment methods. For certain payment methods, including credit and debit cards, we pay interchange and other
fees, which may increase over time. We rely on independent service providers for payment processing, including credit and debit cards.
If these independent service providers become unwilling or unable to provide these services to us or if the cost of using these providers
increases, our business could be harmed. We are also subject to payment card association operating rules and agreements, including PCI-DSS,
certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult
or impossible for us to comply. If we fail to comply with these rules or requirements, or if our data security systems are breached or
compromised, we may be liable for losses incurred by card issuing banks or consumers, subject to fines and higher transaction fees, lose
our ability to accept credit or debit card payments from our consumers, or process electronic fund transfers or facilitate other types
of payments. Any failure to comply could significantly harm our brand, reputation, business, and results of operations.
 
Our
success is substantially dependent on the service of certain members of our board or directors and senior management.
 
The
loss of the services of our senior management could make it more difficult to successfully operate our business and achieve our business
goals. We also may be unable to retain existing management, or technical, sales and client support personnel that are critical to our
success, which could result in harm to our customer and employee relationships, loss of key information, expertise or know-how and unanticipated
recruitment and training costs. We have not obtained key man life insurance policies on any members of our senior management team. As
a result, we would not be protected against the associated financial loss if we were to lose the services of members of our senior management
team.
 
We
face various risks related to health epidemics, pandemics and similar outbreaks, which may adversely affect our business.
 
Our
global operations, and those of the third parties upon whom we rely, have been, and could be in the future, adversely affected by health
epidemics, pandemics and similar outbreaks, such as the COVID-19 pandemic. Despite our efforts, and the efforts of third parties upon
whom we rely, to manage these matters, their ultimate effects also depend on factors beyond our knowledge or control, including the duration,
severity and recurrence of any outbreak and actions taken to contain its spread and mitigate its public health effects. Health epidemics,
pandemics and similar outbreaks may adversely affect our business, including by resulting in (i) significant volatility in demand for
our products and services, (ii) changes in consumer behavior and preferences, (iii) disruptions of our manufacturing and supply chain
operations, (iv) limitations on our employees’ ability to work and travel and (v) changes to economic or political conditions in
markets in which we operate.
 
We
are subject to many hazards and operational risks that can disrupt our business, some of which may not be insured or fully covered by
insurance.
 
Our
operations are subject to many hazards and operational risks inherent to our business, including general business risks, product liability,
product recall and damage to third parties. Our insurance coverage may be inadequate to cover our liabilities related to such hazards
or operational risks. In addition, we may not be able to maintain adequate insurance in the future at rates we consider reasonable and
commercially justifiable, and insurance may not continue to be available on terms as favorable as our current arrangements. The occurrence
of a significant uninsured claim, or a claim in excess of the insurance coverage limits maintained by us could harm our business, results
of operations and financial condition.
 

20
 

 
Risks
Related to Our Corporate Structure
 
We
may rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements
we may have. In the future, funds may not be available to fund operations or for other use outside of Hong Kong, due to interventions
in, or the imposition of restrictions and limitations on, our ability or our Hong Kong subsidiary by the PRC government to transfer cash.
Any limitation on the ability of our Hong Kong subsidiary to make payments to us could have a material adverse effect on our ability
to conduct our business and might materially decrease the value of our common stock.
 
We
are a holding company incorporated in Delaware, and we may rely on dividends and other distributions on equity paid by our Hong Kong
subsidiary for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our
shareholders and service any debt we may incur. If PMA incurs debt on its own behalf in the future, the instruments governing the debt
may restrict its ability to pay dividends or make other distributions to us.
 
Under
the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us.
The PRC laws and regulations do not currently have any material impact on transfers of cash from Perfect Moment Ltd. to PMA or from PMA
to Perfect Moment Ltd., our shareholders and U.S. investors. However, the Chinese government may, in the future, impose restrictions
or limitations on our ability to transfer money out of Hong Kong, to distribute earnings and pay dividends to and from the other entities
within our organization, or to reinvest in our business outside of Hong Kong. Such restrictions and limitations, if imposed in the future,
may delay or hinder the expansion of our business to outside of Hong Kong and may affect our ability to receive funds from our operating
subsidiary in Hong Kong. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in
each case, that restrict or otherwise unfavorably impact the ability or way we conduct our business, could require us to change certain
aspects of our business to ensure compliance, which could decrease demand for our services, reduce revenues, increase costs, require
us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more
stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected
and such measured could materially decrease the value of our common stock.
 
Recently,
the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in mainland
China with little or no advance notice. In the future, we may be subject to PRC laws and regulations related to the current business
operations of our Hong Kong operating subsidiary and any changes in such laws and regulations and interpretations may impair its ability
to operate profitably, which could result in a material negative impact on its operations and/or the value of the securities we are registering
for sale.
 
Although
we have direct ownership of our operating entities in Hong Kong and currently do not have or intend to have any subsidiary or any contractual
arrangement to establish a variable interest entity structure with any entity in mainland China, we are still subject to certain legal
and operational risks associated with one of our operating subsidiaries, PMA, being based in Hong Kong and having all of its operations
to date in Hong Kong. Additionally, the legal and operational risks associated in mainland China may also apply to operations in Hong
Kong, and we face the risks and uncertainties associated with the complex and evolving PRC laws and regulations and as to whether and
how the recent PRC government statements and regulatory developments. In the event that we or our Hong Kong subsidiary were to become
subject to PRC laws and regulations, we could incur material costs to ensure compliance, and we or our Hong Kong subsidiary might be
subject to fines, and/or no longer be permitted to continue business operations as presently conducted.
 
Risks
Related to Our Supply Chain
 
We
rely on a limited number of third-party suppliers to provide high quality raw materials.
 
Our
products require high quality raw materials, including down, softshell, wool, neoprene, and cotton. We do not manufacture our products
or the raw materials for them and rely instead on suppliers. Many of the specialty fabrics used in our products are technically advanced
textile products developed and manufactured by third parties and may be available, in the short-term, from only one or a limited number
of sources. We have no long-term contracts with any of our suppliers or manufacturers for the production and supply of our raw materials
and products, and we compete with other companies for fabrics, other raw materials, and production.
 

21
 

 
We
work with a group of approximately 11 vendors that manufacture our products, 8 of which produced products in the fiscal year ended March
31, 2024. During the fiscal year ended March 31, 2024, the largest single manufacturer, Everich Garments Group Ltd., produced approximately
75% of our products and substantially all of our products were manufactured in China. We work with a group of approximately 3 suppliers
to provide the fabrics for our products. For the fiscal year ended March 31, 2024, the largest single supplier, Toray International Inc.,
produced approximately 63% of the fabric for our products. During the fiscal year ended March 31, 2024, approximately 63% of our fabrics
originated from Japan and 37% from China. We also source other raw materials which are used in our products, including items such as
content labels, elastics, buttons, clasps and drawcords from suppliers located predominantly in the Asia Pacific region.
 
The
price of raw materials depends on a wide variety of factors largely beyond the control of the Company. A shortage, delay or interruption
of supply for any reason, including delays caused by the ongoing COVID-19 pandemic, could negatively impact our ability to fulfill orders
and have an adverse impact on our financial results. In addition, while our suppliers, in turn, source from a number of sub-suppliers,
we rely on a very small number of direct suppliers for certain raw materials. As a result, any disruption to these relationships could
have an adverse effect on our business. Events that adversely affect our suppliers could impair our ability to obtain inventory in the
quantities and at the quality that we require. Such events include difficulties or problems with our suppliers’ businesses, finances,
labor relations, ability to import raw materials, costs, production, insurance and reputation, as well as natural disasters, public health
emergencies or other catastrophic occurrences. Our supply of fabrics and raw materials, for example, could be disrupted by the impact
of the ongoing COVID-19 pandemic, especially in Asia, and the related government and private sector responsive actions such as border
closures, restrictions on product shipments, and travel restrictions. A significant slowdown in the retail industry as a whole may also
result in bankruptcies or permanent closures of some of our suppliers and third-party vendors. Furthermore, there can be no assurance
that our suppliers will continue to provide fabrics and raw materials or provide products that are consistent with our standards. More
generally, if we need to replace an existing supplier, additional supplies or additional manufacturing capacity may not be available
when required on terms that are acceptable to us, or at all, and any new supplier may not meet our strict quality requirements. In the
event we are required to find new sources of supply, we may encounter delays in production, inconsistencies in quality and added costs
as a result of the time it takes to train our suppliers and manufacturers in our methods, products and quality control standards. Any
delays, interruption or increased costs in the supply of our raw materials could have an adverse effect on our ability to meet customer
demand for our products and result in lower revenue and profitability both in the short and long-term.
 
If
our independent manufacturers or our suppliers fail to use ethical business practices and fail to comply with changing laws and regulations
or our applicable guidelines, our brand image could be harmed due to negative publicity.
 
Our
core values, which include developing the highest quality products while operating with integrity, are an important component of our
brand image, which makes our reputation sensitive to allegations of unethical or improper business practices, whether real or perceived.
We do not control our suppliers and manufacturers or their business practices. Accordingly, we cannot guarantee their compliance with
our guidelines or the law. A lack of compliance could lead to reduced sales or recalls or damage to our brand or cause us to seek alternative
suppliers, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions of our
operations. In addition, many of our products include materials that are heavily regulated in many jurisdictions. Certain jurisdictions
in which we sell have various regulations related to manufacturing processes and the chemical content of our products, including their
component parts. Monitoring compliance by our manufacturers and suppliers is complicated, and we are reliant on their compliance reporting
in order to comply with regulations applicable to our products. This is further complicated by the fact that expectations of ethical
business practices continually evolve and may be substantially more demanding than applicable legal requirements. Ethical business practices
are also driven in part by legal developments and by diverse groups active in publicizing and organizing public responses to perceived
ethical shortcomings. Accordingly, we cannot predict how such regulations or expectations might develop in the future and cannot be certain
that our guidelines or current practices would satisfy all parties who are active in monitoring our products or other business practices
worldwide.
 

22
 

 
Labor-related
matters, including labor disputes, relating to our suppliers may adversely affect our operations.
 
Potential
labor disputes at independent factories where our goods are produced, shipping ports, or transportation carriers create risks for our
business, particularly if a dispute results in work slowdowns, lockouts, strikes or other disruptions during our peak manufacturing,
shipping and selling seasons. Any potential labor dispute could materially affect our costs, decrease our sales, harm our reputation
or otherwise negatively affect our sales, profitability or financial condition. Further, the risks to our business due to a pandemic
or other public health emergency, such as the ongoing COVID-19 pandemic, include risks to worker health and safety, prolonged restrictive
measures put in place in order to control the crisis and limitations on travel, which may result in temporary shortages of staff or unavailability
of certain workers with key expertise or knowledge of our business and, impact on productivity.
 
The
operations of many of our suppliers are subject to additional risks that are beyond our control.
 
Almost
all of our suppliers are located outside of North America and the United Kingdom, and as a result, we are subject to risks associated
with doing business outside of these regions, including:
 


 
●
the
    impact of health conditions, including COVID-19, and related government and private sector responsive actions, and other changes
    in local economic conditions in countries where our suppliers or manufacturers are located;

 
 
 

 
●
political
    unrest, terrorism, labor disputes, and economic instability resulting in the disruption of trade from foreign countries in which
    our products are manufactured;

 
 
 

 
●
fluctuations
    in foreign currency exchange rates;

 
 
 

 
●
the
    imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties,
    taxes and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds;

 
 
 

 
●
reduced
    protection for intellectual property rights, including trademark protection, in some countries, particularly in the PRC; and

 
 
 

 
●
disruptions
    or delays in shipments whether due to port congestion, labor disputes, product regulations and/or inspections or other factors, natural
    disasters or health pandemics, or other transportation disruptions.

 
These
and other factors beyond our control could interrupt our suppliers’ production in offshore facilities, influence the ability of
our suppliers to export our products cost-effectively or at all and inhibit our suppliers’ ability to procure certain materials,
any of which could harm our business, financial condition, and results of operations.
 
The
fluctuating cost of raw materials could increase our cost of goods sold and cause our results of operations and financial condition to
suffer.
 
The
fabrics used to make our products include synthetic fabrics whose raw materials include petroleum-based products. Our products also include
silver and natural fibers, including cotton. Our costs for raw materials are affected by, among other things, weather, consumer demand,
speculation on the commodities market, the relative valuations and fluctuations of the currencies of producer versus consumer countries,
and other factors that are generally unpredictable and beyond our control. Increases in the cost of raw materials, including petroleum
or the prices we pay for silver and our cotton yarn and cotton-based textiles, could have a material adverse effect on our cost of goods
sold, results of operations, financial condition, and cash flows.
 
Additionally,
increasing costs of labor, freight and energy could increase our and our suppliers’ cost of goods. If our suppliers are affected
by increases in their costs of labor, freight and energy, they may attempt to pass these cost increases on to us. If we pay such increases,
we may not be able to offset them through increases in our pricing, which could adversely affect our results of operations and financial
condition.
 

23
 

 
If
we encounter problems with our distribution system, our ability to deliver our products to the market and to meet customer expectations
could be harmed.
 
We
rely on our distribution facilities for substantially all of our product distribution. Our distribution facilities include computer controlled
and automated equipment, which means their operations may be subject to a number of risks related to security or computer viruses, the
proper operation of software and hardware, electronic or power interruptions, or other system failures. In addition, our operations could
also be interrupted by labor difficulties, extreme or severe weather conditions or by floods, fires, or other natural disasters near
our distribution centers. If we encounter problems with our distribution system, our ability to meet customer expectations, manage inventory,
complete sales, and achieve objectives for operating efficiencies could be harmed.
 
Increasing
labor costs and other factors associated with the production of our products in China could increase the costs to produce our products.
 
Substantially
all of our products are produced in China and increases in the costs of labor and other costs of doing business in the countries in this
area could significantly increase our costs to produce our products and could have a negative impact on our operations and earnings.
Factors that could negatively affect our business include labor shortages and increases in labor costs, difficulties and additional costs
in transporting products manufactured from these countries to our distribution centers and significant revaluation of the currencies
used in these countries, which may result in an increase in the cost of producing products. Also, the imposition of trade sanctions or
other regulations against products imported by us from, or the loss of “normal trade relations” status with any country in
which our products are manufactured, could significantly increase our cost of products and harm our business.
 
Risks
Related to Doing Business in Hong Kong
 
It
may be difficult for overseas shareholders and/or regulators to conduct investigations or collect evidence within the territory of China,
including Hong Kong.
 
Shareholder
claims or regulatory investigations that are common in the United States generally are difficult to pursue as a matter of law or practicality
in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations
or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities
regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the
securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism.
Furthermore, according to Article 177 of the PRC Securities Law (“Article 177”), which became effective in March 2020, no
overseas securities regulator is allowed to directly conduct investigations or evidence collection activities within the territory of
the mainland China. While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability
for an overseas securities regulator to directly conduct investigations or evidence collection activities within mainland China may further
increase difficulties faced by you in protecting your interests.
 
The
PRC laws and regulations and the enforcement of such that apply or are to be applied to Hong Kong can change quickly with little or no
advance notice. As a result, the Hong Kong legal system embodies uncertainties which could limit the availability of legal protections,
which could result in a material change in PMA’s operations and/or the value of the securities we are registering for sale.
 
As
one of the conditions for the handover of the sovereignty of Hong Kong to China, China accepted conditions such as Hong Kong’s
Basic Law (the “Basic Law”). The Basic Law ensured Hong Kong will retain its own currency (the Hong Kong Dollar), legal system,
parliamentary system and people’s rights and freedom for fifty years from 1997. This agreement has given Hong Kong the freedom
to function with a high degree of autonomy. The Special Administrative Region of Hong Kong is responsible for its own domestic affairs
including, but not limited to, the judiciary and courts of last resort, immigration and customs, public finance, currencies and extradition.
Hong Kong continues using the English common law system.
 

24
 

 
However,
if the PRC attempts to alter its agreement to allow Hong Kong to function autonomously, this could potentially impact Hong Kong’s
common law legal system and may in turn bring about uncertainty in, for example, the enforcement of our contractual rights. This could,
in turn, materially and adversely affect our Hong Kong operating subsidiary’s business and operations. Additionally, intellectual
property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly,
we cannot predict the effect of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to
existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties
could limit the legal protections available to us, including the ability to enforce agreements with the customers.
 
There
are some political risks associated with conducting business in Hong Kong.
 
Any
adverse economic, social and/or political conditions, material social unrest, strike, riot, civil disturbance or disobedience, as well
as significant natural disasters, may affect the market and may adversely affect the business operations of PMA. Hong Kong is a special
administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law, namely, Hong Kong’s
constitutional document, which provides Hong Kong with a high degree of autonomy and executive, legislative and independent judicial
powers, including that of final adjudication under the principle of “one country, two systems. However, there is no assurance that
there will not be any changes in the economic, political and legal environment in Hong Kong in the future. Any change of such political
arrangements may pose an immediate threat to the stability of the economy in Hong Kong, thereby directly and adversely affecting our
results of operations and financial positions.
 
Under
the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, Hong Kong is exclusively in charge
of its internal affairs and external relations, while the government of the PRC is responsible for its foreign affairs and defense. As
a separate customs territory, Hong Kong maintains and develops relations with foreign states and regions. Based on certain recent development
including the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region
issued by the Standing Committee of the PRC National People’s Congress in June 2020, the U.S. State Department has indicated that
the United States no longer considers Hong Kong to have significant autonomy from China and President Trump signed an executive order
and Hong Kong Autonomy Act (“HKAA”) to remove Hong Kong’s preferential trade status and to authorize the U.S. administration
to impose blocking sanctions against individuals and entities who are determined to have materially contributed to the erosion of Hong
Kong’s autonomy. The United States may impose the same tariffs and other trade restrictions on exports from Hong Kong that it places
on goods from mainland China. These and other recent actions may represent an escalation in political and trade tensions involving the
U.S., China and Hong Kong, which could potentially harm our business.
 
Our
revenue is susceptible to the ongoing incidents or factors which affect the stability of the social, economic and political conditions
in Hong Kong. Any drastic events may adversely affect our Hong Kong operating subsidiary’s business operations. Such adverse events
may include changes in economic conditions and regulatory environment, social and/or political conditions, civil disturbance or disobedience,
as well as significant natural disasters. Given the relatively small geographical size of Hong Kong, any of such incidents may have a
widespread effect on our Hong Kong operating subsidiary’s business operations, which could in turn adversely and materially affect
our business, results of operations and financial condition. It is difficult to predict the full impact of the HKAA on Hong Kong and
companies with operations in Hong Kong like us. Furthermore, legislative or administrative actions in respect of China-U.S. relations
could cause investor uncertainty for affected issuers, including us, and the market price of our common stock could be adversely affected.
 

25
 

 
Risks
Related to Information Security and Technology
 
Our
marketing programs, ecommerce initiatives and use of customer information are governed by an evolving set of laws and enforcement
trends and unfavorable changes in those laws or trends, or our failure to comply with existing or future laws, could substantially harm
our business and results of operations.
 
We
collect, process, maintain and use data, including sensitive information on individuals, available to us through online activities and
other customer interactions in our business. Our current and future marketing programs may depend on our ability to collect, maintain
and use this information, and our ability to do so is subject to evolving and increasingly demanding international, U.S., U.K., European
and other laws and enforcement trends. We are subject to laws and regulations such as the European Union’s General Data Privacy
Regulation (“GDPR”), the United Kingdom’s General Data Privacy Regulation (“UK-GDPR”) and the California
Consumer Privacy Act (“CCPA”). These regulations require companies to satisfy new requirements regarding the handling of
personal and sensitive data, including its use, protection, and the ability of persons whose data is stored to correct or delete such
data about themselves. Failure to comply with GDPR and UK-GDPR requirements could result in penalties of up to four percent of worldwide
revenue. The GDPR, UK-GDPR, CCPA, and other similar laws and regulations, as well as any associated inquiries or investigations or any
other government actions, may be costly to comply with, increase our operating costs, require significant management time and attention,
and subject us to remedies that may harm our business, including fines, negative publicity, or demands or orders that we modify or cease
existing business practices. We strive to comply with all applicable laws and other legal obligations relating to privacy, data protection
and customer protection, including those relating to the use of data for marketing purposes. It is possible, however, that these requirements
may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another, may conflict with other rules, may
conflict with our practices or fail to be observed by our employees or business partners. If so, we may suffer damage to our reputation
and be subject to proceedings or actions against us by governmental entities or others. Any such proceeding or action could hurt our
reputation, force us to spend significant amounts to defend our practices, distract our management or otherwise have an adverse effect
on our business. Certain of our marketing practices rely upon e-mail to communicate with consumers on our behalf. We may face risk if
our use of e-mail is found to violate the applicable law. We post our privacy policy and practices concerning the use and disclosure
of user data on our websites. Any failure by us to comply with our posted privacy policy or other privacy-related laws and regulations
could result in proceedings which could potentially harm our business. In addition, as data privacy and marketing laws change, we may
incur additional costs to ensure we remain in compliance. If applicable data privacy and marketing laws become more restrictive at the
international, federal or state levels, our compliance costs may increase, our ability to effectively engage customers via personalized
marketing may decrease, our investment in our ecommerce platform may not be fully realized, our opportunities for growth may
be curtailed by our compliance burden and our potential reputational harm or liability for security breaches may increase.
 
Disruption
of our information technology systems or unexpected network interruption could disrupt our business.
 
Many
of our customers shop with us through our ecommerce website. Increasingly, customers are using tablets and smart phones to
shop online with us and with our competitors and to do comparison shopping. We are increasingly using social media and proprietary
mobile apps to interact with our customers and as a means to enhance their shopping experience. Any failure on our part to provide
attractive, effective, reliable, user-friendly ecommerce platforms that offer a wide assortment of merchandise with rapid
delivery options and that continually meet the changing expectations of online shoppers could place us at a competitive
disadvantage, result in the loss of ecommerce and other sales, harm our reputation with customers, have a material adverse
impact on the growth of our ecommerce business globally and could have a material adverse impact on our business and results
of operations.
 
We
are increasingly dependent on information technology systems and third-parties to operate our ecommerce websites, process transactions,
process and handle inventory, producing, selling and shipping goods on a timely basis and maintain cost-efficient operations. We rely
on a number of third parties to help us effectively manage these systems. The failure of our information technology systems to operate
properly or effectively, problems with transitioning to upgraded or replacement systems, or difficulty in integrating new systems, could
adversely affect our business. In addition, we have a global ecommerce website, with the ability to localize content internationally.
Our information technology systems, website and operations of third parties on whom we rely may encounter damage or disruption or slowdown
caused by a failure to successfully upgrade systems, system failures, viruses, computer “hackers”, natural disasters or other
causes. These could cause information, including data related to customer orders, to be lost or delayed which could, especially if the
disruption or slowdown occurred during the holiday season, result in delays in the delivery of products to our customers or lost sales,
which could reduce demand for our products and cause our sales to decline. For example, we implemented a work-from-home policy due to
the COVID-19 pandemic for our workforce. This increase in working remotely could increase our cyber security risk, create data accessibility
concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations. In
addition, if changes in technology cause our information systems to become obsolete, or if our information systems are inadequate to
handle our growth, we could lose customers. We have limited back-up systems and redundancies, and our information technology systems
and websites have experienced system failures and electrical outages in the past which have disrupted our operations. Any significant
disruption in our information technology systems or websites could harm our reputation and credibility and could have a material adverse
effect on our business, financial condition and results of operations.
 

26
 

 
Data
security breaches and other cyber security events could result in disruption to our operations or financial losses and could negatively
affect our reputation, credibility and business.
 
As
with other companies, we are subject to risks associated with data security breaches and other cyber security events. We collect, process,
maintain and use personal information relating to our customers, employees and job-applicants and rely on third parties for the operation
of our ecommerce site and for the various social media tools and websites we use as part of our marketing strategy. Any attempted
or actual unauthorized disclosure of personally identifiable information regarding our employees, customers or website visitors could
harm our reputation and credibility, reduce our ecommerce sales, impair our ability to attract website visitors, reduce our ability
to attract and retain customers and could result in litigation against us or the imposition of significant fines or penalties. Attacks
may be targeted at us, our vendors or customers, or others who have entrusted us with information. Our on-line activities, including
our ecommerce websites, also may be subject to denial of service or other forms of cyber-attacks. While we have taken measures
we believe are reasonable to protect against those types of attacks, those measures may not adequately protect our on-line activities
from such attacks. If a denial-of-service attack or other cyber event were to affect our ecommerce sites or other information
technology systems, our business could be disrupted, we may lose sales or valuable data, and our reputation may be adversely affected.
Additionally, new and evolving data protection legislation such as the GDPR impose new requirements such as shorter notification timeframes
that could increase the risks associated with data security breaches. We have procedures and technology in place designed to safeguard
our customers’ debit and credit cards and our customers’ and employees’ other personal information, and we continue
to devote significant resources to network security, backup and disaster recovery, and other security measures. Nevertheless, these security
measures cannot provide absolute security or guarantee that we will be successful in preventing or responding to every such breach or
disruption. Recently, data security breaches suffered by well-known companies and institutions have attracted a substantial amount of
media attention, prompting new foreign, federal, provincial and state laws and legislative proposals addressing data privacy and security,
as well as increased data protection obligations imposed on merchants by credit card issuers. As a result, we may become subject to more
extensive requirements to protect the customer information that we process in connection with the purchase of our products, resulting
in increased compliance costs. Actual or anticipated attacks may cause us to incur increasing costs including costs to deploy additional
personnel and protection technologies, train employees and engage third party experts and consultants. Advances in computer capabilities,
new technological discoveries or other developments may result in the technology used by us to protect transaction or other data being
breached or compromised. Measures we implement to protect against cyber-attacks may also have the potential to impact our customers’
shopping experience or decrease activity on our websites by making them more difficult to use. Data and security breaches can also occur
as a result of non-technical issues including intentional or inadvertent breach by employees or persons with whom we have commercial
relationships that result in the unauthorized release of personal or confidential information. Any compromise or breach of our security
could result in a violation of applicable privacy and other laws, significant legal and financial exposure and damage to our brand and
reputation or other harm to our business.
 
Risks
Related to Environmental, Social and Governance Issues
 
Climate
change, and related legislative and regulatory responses to climate change, may adversely impact our business.
 
There
is increasing concern that a gradual rise in global average temperatures due to increased concentration of carbon dioxide and other greenhouse
gases in the atmosphere will cause significant changes in weather patterns around the globe, an increase in the frequency, severity and
duration of extreme weather conditions and natural disasters, and water scarcity and poor water quality. A significant portion of our
business is highly dependent on cold-weather seasons and patterns to generate consumer demand for our products. Consumer demand for our
products may be negatively affected to the extent global weather patterns trend warmer, reducing typical patterns of cold-weather events
or increasing weather volatility, which could have an adverse effect on our financial condition, results of operations or cash flows.
 
`These
events could also adversely impact the cultivation of cotton, which is a key resource in the production of our products, disrupt the
operation of our supply chain and the productivity of our contract manufacturers, increase our production costs, impose capacity restraints
and impact the types of apparel products that consumers purchase.
 

27
 

 
These
events could also compound adverse economic conditions and impact consumer confidence and discretionary spending. As a result, the effects
of climate change could have a long-term adverse impact on our business and results of operations. In many countries, governmental bodies
are enacting new or additional legislation and regulations to reduce or mitigate the potential impacts of climate change. If we, our
suppliers or our contract manufacturers are required to comply with these laws and regulations, or if we choose to take voluntary steps
to reduce or mitigate our impact on climate change, we may experience increases in energy, production, transportation and raw material
costs, capital expenditures or insurance premiums and deductibles, which could adversely impact our operations. Inconsistency of legislation
and regulations among jurisdictions may also affect the costs of compliance with such laws and regulations. Any assessment of the potential
impact of future climate change legislation, regulations or industry standards, as well as any international treaties and accords, is
uncertain given the wide scope of potential regulatory change in the countries in which we operate.
 
Increased
scrutiny from investors and others regarding our environmental, social, governance or sustainability responsibilities could result in
additional costs or risks and adversely impact our reputation, employee retention and willingness of customers and suppliers to do business
with us.
 
Investor
advocacy groups, certain institutional investors, investment funds, other market participants, stockholders and customers have focused
increasingly on the environmental, social and governance (“ESG”) or “sustainability” practices of companies.
These parties have placed increased importance on the implications of the social cost of their investments. If our ESG practices do not
meet investor or other industry stakeholder expectations and standards, which continue to evolve, our brand, reputation and employee
retention may be negatively impacted based on an assessment of our ESG practices. Any sustainability report that we publish or other
sustainability disclosure we make may include our policies and practices on a variety of social and ethical matters, including corporate
governance, environmental compliance, employee health and safety practices, human capital management, product quality, supply chain management
and workforce inclusion and diversity. It is possible that stakeholders may not be satisfied with our ESG practices or the speed of their
adoption. We could also incur additional costs and require additional resources to monitor, report and comply with various ESG practices.
Also, our failure, or perceived failure, to meet the standards included in any sustainability disclosure could negatively impact our
reputation, employee retention and the willingness of our customers and suppliers to do business with us.
 
Risks
Related to Global Economic, Political and Regulatory Conditions
 
An
economic recession, depression, downturn or economic or political uncertainty in our key markets may adversely affect consumer discretionary
spending and demand for our products.
 
Many
of our products may be considered discretionary items for consumers. Uncertain or challenging global economic and political conditions
could impact our performance, including our ability to successfully expand internationally. Some of the factors that may influence consumer
spending on discretionary items include general economic conditions (particularly those in North America), high levels of unemployment,
health pandemics (such as the impact of the current COVID-19 pandemic, including reduced store traffic and widespread temporary closures
of retail locations), higher consumer debt levels, reductions in net worth based on market declines and uncertainty, home foreclosures
and reductions in home values, fluctuating interest and foreign currency rates and credit availability, government austerity measures,
fluctuating fuel and other energy costs, fluctuating commodity prices, tax rates and general uncertainty regarding the overall future
economic environment. To date, COVID-19 and related restrictions and mitigation measures have negatively impacted the global economy
and created significant volatility and disruption of financial markets. Political unrest could also negatively impact our customers and
employees, reduce consumer spending and adversely impact our business and results of operations. As global economic conditions continue
to be volatile or economic uncertainty remains, trends in consumer discretionary spending also remain unpredictable and subject to reductions
due to credit constraints and uncertainties about the future. Unfavorable economic conditions may lead consumers to delay or reduce purchases
of our products. Consumer demand for our products may not reach our targets, or may decline, when there is an economic downturn or economic
uncertainty in our key markets, particularly in North America. China is a target growth market for us, although consumer demand for our
products there may also be impacted by unfavorable economic conditions in China. Our sensitivity to economic cycles and any related fluctuation
in consumer demand may have a material adverse effect on our financial condition.
 

28
 

 
We
may be unable to source and sell our merchandise profitably or at all if new trade restrictions are imposed or existing restrictions
become more burdensome.
 
The
countries in which our products are produced or sold have imposed and may impose additional quotas, duties, tariffs or other restrictions
or regulations, or may adversely adjust prevailing quota, duty or tariff levels. The results of any audits or related disputes regarding
these restrictions or regulations could have an adverse effect on our consolidated financial statements for the period or periods for
which the applicable final determinations are made. Countries impose, modify and remove tariffs and other trade restrictions in response
to a diverse array of factors, including global and national economic and political conditions, which make it impossible for us to predict
future developments regarding tariffs and other trade restrictions. Trade restrictions, including tariffs, quotas, embargoes, safeguards
and customs restrictions, could increase the cost or reduce the supply of products available to us, could increase shipping times or
may require us to modify our supply chain organization or other current business practices, any of which could harm our business, financial
condition and results of operations.
 
We
are dependent on international trade agreements and regulations. Adverse changes in, or withdrawal from, trade agreements or political
relationships between the United States and the PRC, Canada or other countries where we sell or source our products, could negatively
impact our results of operations or cash flows. Any tariffs imposed between the United States and the PRC could increase the costs of
our products. General geopolitical instability and the responses to it, such as the possibility of sanctions, trade restrictions and
changes in tariffs, including recent sanctions against the PRC, tariffs imposed by the United States and the PRC and the possibility
of additional tariffs or other trade restrictions between the United States and Mexico, could adversely impact our business. It is possible
that further tariffs may be introduced or increased. Such changes could adversely impact our business and could increase the costs of
sourcing our products from the PRC or could require us to source more of our products from other countries.
 
There
could be changes in economic conditions in the United Kingdom or European Union (“EU”), including due to the United Kingdom’s
withdrawal from the EU, foreign exchange rates and consumer markets. Our business could be adversely affected by these changes, including
by additional duties on the importation of our products into the United Kingdom from the EU and as a result of shipping delays or congestion.
 
Changes
in tax laws or unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.
 
We
are subject to the income tax laws of the United States, the United Kingdom and several other foreign jurisdictions. Our effective income
tax rates could be unfavorably impacted by a number of factors, including changes in the mix of earnings amongst countries with differing
statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, new tax interpretations and
guidance, the outcome of income tax audits in various jurisdictions around the world and any repatriation of unremitted earnings for
which we have not previously accrued applicable U.S. income taxes and foreign withholding taxes.
 
We
and our subsidiaries engage in a number of intercompany transactions across multiple tax jurisdictions and the profit allocation and
transfer pricing terms and conditions may be scrutinized by local tax authorities during an audit and any resulting changes may impact
our mix of earnings in countries with differing statutory tax rates.
 
Current
economic and political conditions make tax rules in any jurisdiction, including the United States and the United Kingdom, subject to
significant change. Changes in applicable U.S., U.K. or other foreign tax laws and regulations, or their interpretation and application,
including the possibility of retroactive effect, could affect our income tax expense and profitability.
 

29
 

 
Our
failure to comply with trade and other regulations could lead to investigations or actions by government regulators and negative publicity.
 
The
labeling, distribution, importation, marketing and sale of our products are subject to extensive regulation by various federal agencies,
including the Federal Trade Commission, Consumer Product Safety Commission and state attorneys general in the United States, as well
as by various other federal, state, local and international regulatory authorities in the countries in which our products are distributed
or sold. If we fail to comply with any of these regulations, we could become subject to enforcement actions or the imposition of significant
penalties or claims, which could harm our results of operations or our ability to conduct our business. In addition, any audits and inspections
by governmental agencies related to these matters could result in significant settlement amounts, damages, fines or other penalties,
divert financial and management resources and result in significant legal fees. An unfavorable outcome of any particular proceeding could
have an adverse impact on our business, financial condition and results of operations. In addition, the adoption of new regulations or
changes in the interpretation of existing regulations may result in significant compliance costs or discontinuation of product sales
and could impair the marketing of our products, resulting in significant loss of net revenue.
 
Our
international operations are also subject to compliance with the U.S. Foreign Corrupt Practices Act (the “FCPA”) and other
anti-bribery laws applicable to our operations. In many countries, particularly in those with developing economies, it may be a local
custom that businesses operating in such countries engage in business practices that are prohibited by the FCPA or other U.S. and international
laws and regulations applicable to us. Although we have implemented procedures designed to ensure compliance with the FCPA and similar
laws, some of our employees, agents or other partners, as well as those companies to which we outsource certain of our business operations,
could take actions in violation of our policies. Any such violation could have a material and adverse effect on our business.
 
Because
a significant portion of our net revenue and expenses are generated in countries other than the United States, fluctuations in foreign
currency exchange rates have affected our results of operations and may continue to do so in the future.
 
The
functional currency of our foreign subsidiaries is generally the applicable local currency. Our consolidated financial statements are
presented in U.S. dollars. Therefore, the net revenue, expenses, assets and liabilities of our foreign subsidiaries are translated from
their functional currencies into U.S. dollars. Fluctuations in the value of the U.S. dollar affect the reported amounts of net revenue,
expenses, assets and liabilities. Foreign exchange differences which arise on translation of our foreign subsidiaries’ balance
sheets into U.S. dollars are recorded as a foreign currency translation adjustment in accumulated other comprehensive income or loss
within stockholders’ equity. We also have exposure to changes in foreign exchange rates associated with transactions which are
undertaken by our subsidiaries in currencies other than their functional currency. Such transactions include intercompany transactions
and inventory purchases denominated in currencies other than the functional currency of the purchasing entity. As a result, we have been
impacted by changes in exchange rates and may be impacted for the foreseeable future. The potential impact of currency fluctuation increases
as our international expansion increases. We are exposed to credit-related losses in the event of nonperformance by the counterparties
to forward currency contracts used in our hedging strategies.
 
Risks
Related to Intellectual Property
 
Our
fabrics and manufacturing technology generally are not patented and can be imitated by our competitors. If our competitors sell products
similar to ours at lower prices, our net revenue and profitability could suffer.
 
The
intellectual property rights in the technology, fabrics and processes used to manufacture our products generally are owned or controlled
by our suppliers and are generally not unique to us. Our ability to obtain intellectual property protection for our products is therefore
limited and we do not generally own patents or hold exclusive intellectual property rights in the technology, fabrics or processes underlying
our products. As a result, our current and future competitors are able to manufacture and sell products with performance characteristics,
fabrics and styling similar to our products. Because many of our competitors have significantly greater financial, distribution, marketing
and other resources than we do, they may be able to manufacture and sell products based on our fabrics and manufacturing technology at
lower prices than we can. If our competitors sell products similar to ours at lower prices, our net revenue and profitability could suffer.
 

30
 

 
If
we are unable to establish and protect our trademarks and other intellectual property rights, counterfeiters may produce copies of our
products and such counterfeit products could damage our brand image.
 
We
currently rely on a combination of copyright, trademark, trade dress and unfair competition laws, as well as confidentiality procedures
and licensing arrangements, to establish and protect our intellectual property rights. The steps we take to protect our intellectual
property rights may not be adequate to prevent infringement of these rights by others, including imitation of our products and misappropriation
of our brand. In addition, intellectual property protection may be unavailable or limited in some foreign countries where laws or law
enforcement practices may not protect our intellectual property rights as fully as in the United States, and it may be more difficult
for us to successfully challenge the use of our intellectual property rights by other parties in these countries. We expect that there
is a high likelihood that counterfeit products or other products infringing on our intellectual property rights will continue to emerge,
seeking to benefit from the consumer demand for Perfect Moment products. These counterfeit products do not provide the functionality
of our products and we believe they are of substantially lower quality, and if customers are not able to differentiate between our products
and counterfeit products, this could damage our brand image. In order to protect our brand, we devote significant resources to the registration
and protection of our trademarks and to anti-counterfeiting efforts worldwide. We actively pursue entities involved in the trafficking
and sale of counterfeit merchandise through legal action or other appropriate measures. In spite of our efforts, counterfeiting still
occurs and, if we are unsuccessful in challenging a third-party’s rights related to trademark, copyright or other intellectual
property rights, this could adversely affect our future sales, financial condition and results of operations. We cannot guarantee that
the actions we have taken to curb counterfeiting and protect our intellectual property will be adequate to protect the brand and prevent
counterfeiting in the future or that we will be able to identify and pursue all counterfeiters who may seek to benefit from our brand.
 
Our
trademarks and other proprietary rights could potentially conflict with the rights of others and we may be prevented from selling some
of our products.
 
Our
success depends in large part on our brand image. We believe that our trademarks and other proprietary rights have significant value
and are important to identifying and differentiating our products from those of our competitors and creating and sustaining demand for
our products. We have applied for and obtained some United States, United Kingdom and foreign trademark registrations, and will continue
to evaluate the registration of additional trademarks as appropriate. However, some or all of these pending trademark applications may
not be approved by the applicable governmental authorities. Moreover, even if the applications are approved, third parties may seek to
oppose or otherwise challenge these registrations. Additionally, we may face obstacles as we expand our product line and the geographic
scope of our sales and marketing. Third parties may assert intellectual property claims against us, particularly as we expand our business
and the number of products we offer. Our defense of any claim, regardless of its merit, could be expensive and time consuming and could
divert management resources. Successful infringement claims against us could result in significant monetary liability or prevent us from
selling some of our products. In addition, resolution of claims may require us to redesign our products, license rights from third parties,
or cease using those rights altogether. Any of these events could harm our business and cause our results of operations, liquidity and
financial condition to suffer.
 
Risks
Related to Legal and Governance Matters
 
We
are subject to periodic claims, litigation, legal proceedings and audits that could result in unexpected expenses and could ultimately
be resolved against us.
 
Our
business requires compliance with many laws and regulations, including labor and employment, sales and other taxes, customs and consumer
protection laws and ordinances that regulate retailers generally and/or govern the importation, promotion and sale of merchandise, and
the operation of stores and warehouse facilities. Failure to comply with these laws and regulations could subject us to lawsuits and
other proceedings, and could also lead to damage awards, fines and penalties. The outcome of some of these legal proceedings, audits
and other contingencies could require us to take, or refrain from taking, actions that could harm our operations or require us to pay
substantial amounts of money, harming our financial condition.
 
In
addition, from time to time, we are involved in litigation and other proceedings, including matters related to product liability claims,
stockholder class action and derivative claims, commercial disputes and intellectual property, as well as trade, regulatory, employment
and other claims related to our business. For example, on December 20, 2023, Aspen Skiing Company, LLC filed a complaint against the
Company in the United Stated District Court for the District of Colorado, alleging, among other things, trademark infringement, false
association, false endorsement, unfair competition and deceptive trade practices by the Company. See Note 17 of the Notes to Consolidated
Financial Statements included elsewhere in this Annual Report.
 

31
 

 
We
have in the past and may become involved in legal proceedings or audits, including government and agency investigations, and consumer,
employment, tort and other litigation. Any of these proceedings could result in significant settlement amounts, damages, fines or other
penalties, divert financial and management resources and result in significant legal fees. An unfavorable outcome of any particular proceeding
could exceed the limits of our insurance policies or the carriers may decline to fund such final settlements and/or judgments and could
have an adverse impact on our business, financial condition and results of operations. In addition, any proceeding could negatively impact
our reputation among our customers and our brand image.
 
Our
business could be negatively affected as a result of actions of activist stockholders or others.
 
We
may be subject to actions or proposals from stockholders or others that may not align with our business strategies or the interests of
our other stockholders. Responding to such actions can be costly and time-consuming, disrupt our business and operations and divert the
attention of our board of directors, management and employees from the pursuit of our business strategies. Such activities could interfere
with our ability to execute our strategic plan. Activist stockholders or others may create perceived uncertainties as to the future direction
of our business or strategy which may be exploited by our competitors and may make it more difficult to attract and retain qualified
personnel and potential customers, and may affect our relationships with current customers, vendors, investors and other third parties.
In addition, a proxy contest for the election of directors at our annual meeting would require us to incur significant legal fees and
proxy solicitation expenses and require significant time and attention by management and our board of directors. The perceived uncertainties
as to our future direction also could affect the market price and volatility of our securities.
 
Anti-takeover
provisions in our charter documents and under the General Corporation Law of the State of Delaware could make an acquisition of us more
difficult and may prevent attempts by our stockholders to replace or remove our management.
 
Provisions
in our amended and restated certificate of incorporation and our bylaws may delay or prevent an acquisition of us or a change in our
management. These provisions impact the ability of the board of directors to issue preferred stock without stockholder approval. In addition,
because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (the
“DGCL”), which prohibits stockholders owning in excess of 15% of our outstanding voting stock from merging or combining with
us for a period of three years after the date of the transaction in which the person acquired more than 15% of our outstanding voting
stock, unless the merger or combination is approved in a prescribed manner. Although we believe these provisions collectively will provide
for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our board of directors, they would apply
even if the offer may be considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any attempts
by our stockholders to replace or remove then-current management by making it more difficult for stockholders to replace members of the
board of directors, which is responsible for appointing the members of management.
 
Anti-takeover
provisions in our charter documents could discourage, delay or prevent a change in control of us and may affect the trading price of
our common stock.
 
Our
corporate documents and the DGCL contain provisions that may enable our board of directors to resist a change in control of us even if
a change in control were to be considered favorable by our stockholders. These provisions:
 


 
●
require
    a 66 and 2/3% stockholder vote to remove directors, who may only be removed for cause;

 
 
 

 
●
authorize
    our board of directors to issue “blank check” preferred stock and to determine the rights and preferences of those shares,
    which may be senior to our common stock, without prior stockholder approval;

 
 
 

 
●
establish
    advance notice requirements for nominating directors and proposing matters to be voted on by stockholders at stockholders’
    meetings;

 

32
 

 


 
●
prohibit
    our stockholders from calling a special meeting and prohibit stockholders from acting by written consent;

 
 
 

 
●
require
    a 66 and 2/3% stockholder vote to effect certain amendments to our certificate of incorporation and bylaws; and

 
 
 

 
●
prohibit
    cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates.

 
These
provisions could discourage, delay or prevent a transaction involving a change in control. These provisions could also discourage proxy
contests and make it more difficult for stockholders to elect directors of their choosing and cause us to take other corporate actions
our stockholders desire.
 
Our
amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive
forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’
ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
 
Our
amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery
of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action
asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders,
any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or
our amended and restated bylaws or any action asserting a claim that is governed by the internal affairs doctrine, in each case subject
to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein and the claim not being
one which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or for which the Court of Chancery
does not have subject matter jurisdiction. Our amended and restated certificate of incorporation provides that state and federal courts
will have concurrent jurisdiction for actions arising under the Securities Act of 1933, as amended (the “Securities Act”),
and the exclusive forum provision will not apply to suits brought to enforce duties and liabilities created by the Exchange Act or any
other claims for which the federal courts have exclusive jurisdiction. Any person purchasing or otherwise acquiring any interest in any
shares of our common stock shall be deemed to have notice of and to have consented to this provision of our amended and restated certificate
of incorporation. This choice of forum provision may limit our stockholders’ ability to bring a claim in a judicial forum that
it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us
and our directors, officers, employees and agents even though an action, if successful, might benefit our stockholders. Stockholders
who do bring a claim in the Court of Chancery could face additional litigation costs in pursuing any such claim, particularly if they
do not reside in or near Delaware. The Court of Chancery may also reach different judgments or results than would other courts, including
courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or
results may be more favorable to us than to our stockholders. Alternatively, if a court were to find this provision of our amended and
restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions
or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could have a material
adverse effect on our business, financial condition or results of operations.
 
Risks
Related to Ownership of Our Common Stock
 
We
are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies
will make our common stock less attractive to investors.
 
For
as long as we continue to be an emerging growth company, we intend to take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies including, but not limited to, reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find
our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as
a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
 

33
 

 
We
will remain an emerging growth company until the earliest of (i) the end of the fiscal year in which the market value of our common stock
that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter
after we have been a reporting company in the United States for at least 12 months, (ii) the end of the fiscal year in which we have
total annual gross revenue of $1.07 billion or more during such fiscal year, (iii) the date on which we issue more than $1 billion in
non-convertible debt in a three-year period or (iv) February 7, 2029.
 
 If we are unable to implement and maintain effective internal control over financial
reporting investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common
stock may be negatively affected.
 
As
a public company, we will be required to maintain internal control over financial reporting for the year ending March 31, 2025 and to
report any material weaknesses in such internal control. Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”)
requires that we evaluate and determine the effectiveness of our internal control over financial reporting and, beginning with our annual
report for the fiscal year ending March 31, 2025, provide a management report on the internal controls over financial reporting, which
must be attested to by our independent registered public accounting firm to the extent we decide not to avail ourselves of the exemption
provided to an emerging growth company, as defined by the Jumpstart Our Business Startups Act.  If we have a material
weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our consolidated financial
statements may be materially misstated. If we identify material weaknesses
in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley
Act in a timely manner, if we are unable to assert that our internal control over financial reporting are effective, or if our independent
registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting,
if and when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of
our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities
are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.
 
Because
we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation of our common stock,
if any, will be your sole source of gain.
 
We
have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to
finance the growth and development of our business. In addition, the terms of any future financing agreements may preclude us from paying
dividends. As a result, capital appreciation, if any, of our common stock will be an investor’s sole source of gain for the foreseeable
future.
 
We
may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.
 
On
February 12, 2024, we consummated the initial public offering of our common stock for aggregate approximate net proceeds of $6,009, after
deducting underwriting discounts and commissions and estimated offering expenses. Based upon our current operating plan and assumptions,
we expect that the net proceeds from the initial public offering and our existing cash balances and expected cash flows from operations,
alongside the continuance of our existing financing arrangements, and the automatic conversion of the outstanding balance of the Notes
upon the closing of the initial public offering will be sufficient to fund our operations for at least the next 12 months, excluding financing to support production (i.e. timing of working capital). However,
our operating plan may change, and our assumptions may prove to be wrong, as a result of many factors currently unknown to us, and we
could use our available capital resources sooner than we expect. We may need to seek additional funds sooner than planned, through public
or private equity or debt financings or other third-party funding or a combination of these approaches. Even if we believe we have sufficient
funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or based upon specific
strategic considerations.
 

34
 

 
Any
additional capital-raising efforts may divert our management’s attention from the operation of our business. In addition, we cannot
guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. If we are unable to
obtain sufficient amounts of additional capital, when and if we require it, we may be required to reduce the scope of our planned development,
which could harm our business, financial condition and results of operations.
 
If
we raise additional capital through further issuances of equity or convertible debt securities, our existing stockholders could suffer
significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders
of our common stock. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising
activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue
business opportunities, including potential acquisitions. If we are unable to obtain adequate financing or financing on terms satisfactory
to us, when and if we require it, our ability to continue to support our business growth, and to respond to business challenges could
be significantly impaired.
 
Future
sales and issuances of our common stock or rights to purchase common stock, including pursuant to our 2021 Equity Incentive Plan, could
result in additional dilution of the percentage ownership of our stockholders.
 
We
expect that significant additional capital will be needed in the future to continue our planned operations. To raise capital, we may
sell substantial amounts of common stock or securities convertible into or exchangeable for common stock. These future issuances of common
stock or common stock-related securities, together with the exercise of outstanding options and any additional shares issued in connection
with acquisitions, if any, may result in material dilution to our investors. Such sales may also result in material dilution to our existing
stockholders, and new investors could gain rights, preferences and privileges senior to those of holders of our common stock.
 
Pursuant
to the 2021 Plan, the plan administrator is authorized to grant equity-based incentive awards to our directors, executive officers and
other employees and service providers. As of June 26, 2024, there were 1,705,207 shares of common stock reserved for issuance
in connection with outstanding awards granted under the 2021 Plan and 2,519,750 shares of common stock were available for future
issuance under the 2021 Plan. Future equity incentive grants and issuances of common stock under awards outstanding under the 2021 Plan
may result in dilution to our stockholders.
 
We
will incur increased costs as a result of being a public company.
 
We
will face increased legal, accounting, administrative and other costs and expenses as a public company that we did not incur as a private
company. In addition, costs have been incurred in the years ended March 31, 2024 and 2023 in preparation of becoming a public company.
The Sarbanes-Oxley Act, including the requirements of Section 404, as well as new rules and regulations subsequently implemented by the
SEC and the Public Company Accounting Oversight Board impose additional reporting and other obligations on public companies. We expect
that compliance with these public company requirements will increase our costs and make some activities more time-consuming. A number
of those requirements will require us to carry out activities we have not done previously. For example, we will adopt new internal controls
and disclosure controls and procedures. In addition, we will incur additional expense associated with our SEC reporting requirements.
Furthermore, if we identify an issue in complying with those requirements (for example, if we or our accountants identify a material
weakness or significant deficiency in our internal control over financial reporting), we could incur additional costs rectifying those
issues, and the existence of those issues could adversely affect us, our reputation or investor perceptions of us. We also expect that
it will be difficult and expensive to obtain director officer liability insurance, and we may be required to accept reduced policy limits
and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us
to attract and train qualified people to serve on our board of directors or as executive officers. Advocacy efforts by stockholders and
third parties may also prompt even more changes in corporate governance and reporting requirements. We expect that the additional reporting
and other obligations imposed on us by these rules and regulations will increase our legal and financial compliance costs and administrative
fees significantly. These increased costs will require us to divert a significant amount of money that we could otherwise use to expand
our business and achieve our strategic objectives.
 

35
 

 
If
securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they
change their recommendations regarding our common stock adversely, the price and trading volume of our common stock could decline.
 
The
trading market for our common stock is influenced by the research and reports that industry or securities analysts publish about us,
our business, our market or our competitors. If any of the analysts who cover us or may cover us in the future change their recommendation
regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common
stock would likely decline. If any analyst who covers us or may cover us in the future were to cease coverage of our company or fail
to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price or trading
volume of our common stock to decline.
 
ITEM
1B. UNRESOLVED STAFF COMMENTS
 
None.
 
Item
1C. Cybersecurity
 
Risk
management and strategy
 
We
recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information
systems and protect the confidentiality, integrity, and availability of our data.
 
Managing
Material Risks & Integrated Overall Risk Management
 
We
have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture
of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making
processes at every level. Our management team works closely with our IT department to continuously evaluate and address cybersecurity
risks in alignment with our business objectives and operational needs.
 
Oversee
Third-party Risk
 
Because
we are aware of the risks associated with third-party service providers, we have implemented stringent processes to oversee and
manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing
monitoring to ensure compliance with our cybersecurity standards. The monitoring includes annual assessments of the SOC reports (or
international equivalent) of our providers and implementing complementary controls. This approach is designed to mitigate risks
related to data breaches or other security incidents originating from third parties.
 
Risks
from Cybersecurity Threats
 
We
have not encountered cybersecurity challenges that have materially impaired our operations or financial standing.
 
ITEM
2. PROPERTIES
 
Our
corporate headquarters is located in London, England where we lease office space under a lease that expires in April 2025. In addition
to our corporate headquarters, we have an office in Hong Kong, where we lease office space that expires in February 2026.
 
ITEM
3. LEGAL PROCEEDINGS
 
For
a discussion of our legal proceedings, refer to Note 17 “Commitments and Contingencies,” in the notes to our
audited consolidated financial statements of this Annual Report.
 
ITEM
4. MINE SAFETY DISCLOSURES
 
Not
applicable.
 


36
 

 
PART
II
 
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
Market
Information
 
Our
common stock trades on The New York Stock Exchange (“NYSE”) under the symbol “PMNT.”
 
Holders
of Common Stock
 
As
of June 26, 2024, there were approximately 218 holders of record of our common stock. These holders of record include depositories that
hold shares of stock for brokerage firms which, in turn, hold shares of stock for numerous beneficial owners.
 
Dividends
 
We
have never declared or paid dividends. We do not intend to pay cash dividends on our common stock for the foreseeable future, but currently
intend to retain any future earnings to fund the development and growth of our business. The payment of dividends if any, on our common
stock will rest solely within the discretion of our board of directors and will depend, among other things, upon our earnings, capital
requirements, financial condition, and other relevant factors.
 
Recent
Sales of Unregistered Securities
 
None.
 
Purchases
of Equity Securities by the Issuer and Affiliated Purchasers
 
None.
 
ITEM
6. [RESERVED]
 
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The
following discussion and analysis of our results of operations and financial condition for the fiscal years ended March 31, 2024 and
2023, should be read in conjunction with our consolidated financial statements and the related notes and the other financial information
that are included elsewhere in this Annual Report. This discussion includes forward-looking statements based upon current expectations
that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. The following discussion contains
forward-looking statements that involve risks and uncertainties such as our plans, estimates, and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements below. Factors that could cause or contribute to those differences
in our actual results include, but are not limited to, those discussed below and those discussed elsewhere within this Annual Report,
particularly in the section entitled “Cautionary Note Regarding Forward-Looking Statements” and the Item entitled “Risk
Factors.”
 

37
 

 
Overview
 
Perfect
Moment is a high-performance, luxury skiwear and lifestyle brand that fuses technical excellence with fashion-led designs. We create apparel and products that feature what we believe is an unmatched combination of fashion, form, function
and fun for women, men and children.
 
Across
all revenue channels, Perfect Moment distributes to over 60 countries. We design our products in-house and work with a variety of suppliers
to manufacture materials and finished goods. Our collections are worn by an evolving list of celebrities and influencers whose perfect
moments are captured across a range of social media platforms.
 
Revenue
 
Total
revenue for the year ended March 31, 2024, was $24,443 compared to $23,438 for the year ended March 31, 2023, an increase of $1,005 or
4.3%. The increase is primarily attributed to an increase in ecommerce revenue of $1,833 or 21.4% versus the prior year.
The increase in ecommerce is attributed to enhanced brand awareness and the Company’s focus on ecommerce. The overall increase
is offset by a decrease in wholesale revenue of $828 or 5.6%. The decrease is attributed to higher purchases from our
wholesale customers in fiscal year 2023 due to the post COVID-19 rebound.
 
Ecommerce
 
The
Company has deployed strategies across the entire sales and marketing funnel as we focus on building a direct relationship with our customer,
which we believe is an important step of following our customer from the ski slopes, to après, to the chalet, and eventually home
expanding our product offering across all seasons.
 
We
remain one of the most followed luxury ski brands globally and increased our followers across all social media platforms (Instagram,
Facebook (Meta) and TikTok) by 19% from March 31, 2023 through March 31, 2024. The number of unpaid celebrities and influencers
driving the top of our funnel is extraordinary for a company of our size. The strength at the top of the funnel provides opportunities
to move our customers through the funnel that not only leads to sales but more importantly allows us to build a community and ultimately
customer loyalty.
 
For
the year ended March 31, 2024, our digital strategies have aligned our customers with the expectations of a luxury brand allowing
us to reach new milestones. Our focus for fiscal year 2024 was to drive full price retail by reducing the number of products on discount
and shortening our discount windows. The strategy was deployed throughout the year including Black Friday where we discounted a smaller
product range than in prior years while providing our customers with a balance between full price and promotional items. The result was
our biggest Black Friday as we delivered $1,833 of gross sales, a 52% increase versus the prior year, while achieving higher margins.
 
Gross
Profit and Margin
 
Our
gross profit for the year ended March 31, 2024 was $9,231 compared to $8,756 for the year ended March 31, 2023, an increase
of $475 or 5.4%. Our gross margins were 37.8% and flat compared to the 37.4% achieved in the prior year.
The increase was primarily attributed to strategic changes in ecommerce driven by less discounting and improvements in the supply
chain with Global-E, offset by a decrease in wholesale margin as well as a shift in revenue to lower margin ecommerce revenue.
 
Improving
our gross margins in ecommerce was a focus in fiscal year 2024, with anticipated improvements to our gross margins in fiscal
year 2025. Currently, all ecommerce orders are dispatched from a third-party distribution center in the United Kingdom and in most instances
the Company is paying duties to cross international borders. Compounding the margin dilution is the fact we are paying duties at full
retail and not at a transfer price. We plan on opening third party operated distribution centers in key markets to lower our duty costs.
The local distribution centers will improve our customer experience, lower our duty cost plus reduce outbound and return shipping cost.
Our first third party distribution center outside of the United Kingdom will be in the United States in FY24.
 
We
anticipate our ecommerce margins to surpass wholesale margins in FY26.
 

38
 

 
Summary
of Key Strategies to Improve Margin
 


 
●
Shift
    towards direct-to-consumer revenue (such as ecommerce and physical retail). We expect that rebalancing our sales from
    wholesale to direct to consumer, coupled with the other margin initiatives would result in a double-digit percentage point improvement
    in our gross margin, due to channel mix, over time.

 
 
 

  
●
Reducing
    product range within skiwear. We believe the current range offers too much choice, and yields poorer margins, resulting from
    a lack of economies of scale and higher levels of markdown and discounts.

 
 
 

  
●
Review
    and modify supplier base. We are expecting our supplier base to evolve as we source fabrics and trims more efficiently and introduce
    new finished good suppliers with better commercial terms (such as lower labor costs or better duty rates due to factories being based
    in the EU, UK, or Vietnam).

 
 
 

  
●
Review
    and revise price positioning. We will continue reviewing our selling prices. We are expecting to introduce better discipline
    and processes to assess price positioning with a focus on margin by each product, country of manufacture and country of selling.
    We expect to raise selling prices to improve the gross margin over time as part of the range development process and will
    monitor price elasticity. We believe prices are relatively in-elastic for our industry and our customer segment, and that pricing
    increases are generally expected by customers annually for luxury goods.

 
 
 

 
●
Focusing
    on reducing costs relating to crossing borders. Operating a global business requires crossing borders with products resulting
    in high costs for freight, duty, couriers and other handling costs. Perfect Moment has grown very quickly and as a result has not
    been able to focus on crossing borders in a cost-effective way. We are focused on reducing these costs and expect to see savings
    over time in freight (for example by using less air freight and more sea freight), lowering duty costs (for example moving production
    to countries with lower tariffs and opening third party logistic hubs) and reducing broker fees through better processes.

 
Our
Business Strategy
 
Perfect
Moment sits at the intersection of three large and growing markets (luxury ski apparel, premium outerwear and athleisure and lifestyle).
Based on the characteristics of these respective markets, we believe we have the right brand profile, geographic footprint, target demographic,
marketing tools and operational expansion plan to gain significant market share. We believe we are also well-positioned to drive sustainable
growth and profitability by executing on the following strategies:
 
Grow
Brand Awareness and Attract New Customers
 
Building
brand awareness among potential new customers and strengthening our connections with those who already know us will be a key driver of
our growth. While we believe our brand has achieved substantial traction globally and those who have experienced our products demonstrate
loyalty, our presence is relatively nascent in many of our markets. We believe we have a significant opportunity to increase brand awareness
and attract new customers to Perfect Moment through word of mouth, brand marketing and performance marketing.
 
In
the past, Perfect Moment’s strong skiing heritage has been used to engage with a core ski audience for whom we believe the combination
of technical performance and retro inspired designs resonate strongly. We believe the nature of skiing as a largely affluent, international
pursuit means there is a large opportunity in aspirational, lifestyle-led social media engagement. We believe Perfect Moment has captured
this social media opportunity to great effect, combining the style and form of the brand with celebrities, influencers, top-tier editorial,
collaborations and luxury locations to create a distinct, fun and engaging aspirational lifestyle narrative. Beyond social media, we
believe Perfect Moment has been able to deploy this same core brand proposition and narrative to direct digital marketing and traditional
media, elevating brand profile and driving high levels of engagement simultaneously. Perfect Moment has also been able to build an effective
online marketing engine driving large volumes of direct, organic search and paid search traffic to our ecommerce website, www.perfectmoment.com.
 

39
 

 
Perfect
Moment expects to continue its approach to social media, building its follower base through a similar and evolving mix of celebrities,
influencers, editorials and locations. It also expects to continue to pursue and scale the effective search engine optimization and paid
search strategies which have contributed to online sales growth, as well as direct marketing and customer engagement via direct customer
communications. Perfect Moment is developing plans to leverage a new Perfect Moment owned physical store network to deepen its brand
identity and profile, as well as drive higher levels of loyalty and engagement at the local level.
 
Brand
marketing and performance marketing also work together to drive millions of visits to our digital platforms. Brand marketing includes
differentiated content, our network of ambassadors, and social media, all of which result in what we believe is outsized engagement with
our community. Our performance marketing efforts are designed to drive customers from awareness to consideration to conversion. These
efforts include retargeting, paid search and product listing advertisements, paid social media advertisements, search engine optimization
and personalized email. We believe our highly productive, diversified strategy generates a significant return on brand equity, driving
sales and building a growing customer database.
 
We
approach this strategy as a funnel, with brand awareness at the top and customer conversion at the bottom, allocating resources across
the top, middle and bottom, and measuring returns on these respective investments.
 
Accelerate
Digital Growth
 
Having
used the wholesale channel to establish our brand globally, we believe we will become less reliant on wholesale partners during the next
5 years by committing more resources to our direct-to-consumer strategy and accelerating our digital growth. We believe technology and
partnerships are the key underpinning factors in any ecommerce business and as such we will continue to enhance customer experience,
focusing on mobile as the dominant growth channel and leveraging the emerging benefits of social and conversational commerce.
 
Pursue
International Expansion and Enter New Markets
 
We
believe there is an opportunity to increase penetration across our existing markets and selectively enter new regions. Although the Perfect
Moment brand is recognized globally, our past investments have been focused on North America, the United Kingdom and the EU and have
driven revenue growth in the United States during the past fiscal year.
 
While
we expect the majority of our near-term growth to continue to come from the United States, the United Kingdom and the EU, we believe
there is a tremendous opportunity over the long term throughout the rest of the world. In the fiscal year ended March 31, 2024, we increased
our outreach in what we believe are the most promising countries in continental Europe. As part of the plan to enter new markets, we
will start with China, as we seek to enhance our ability to serve our international customers and further establish Perfect Moment as
a global brand.
 
We
believe there is a significant opportunity beyond our existing markets, with China representing the next market opening for Perfect Moment.
China is projected to become the largest winter sports market, with people participating expected to reach 50 million by 2025 with 1,000
ski resorts to be open by 2030, according to reports by Daxue Consulting and Capital Mind. We allocated a small amount of inventory to
test the Chinese market directly in November 2024 on Tmall, using local partners to operate, with a digital approach to selling. We were
originally forecasting to run losses with respect to such activities for two years, then become profitable from the third year of such
activities, with China representing less than 10% of our revenue by 2027. The data we now have on this small test has led to exploring
partnership models such as a Joint Venture, where we could benefit for local distribution, market expertise and financial support for
inventory and marketing. We still believe the most significant hurdle to overcome with respect to our plan to enter the Chinese market
is liquidity to fund the initial operating losses.
 
In
order to offer a more localized experience to customers internationally, we intend to offer market-specific languages, currency and content,
as well as strategic international shipping and distribution hubs. We plan to leverage our social media strategy and expand our network
of social media ambassadors to grow our brand awareness globally.
 

40
 

 
Enhance
Our Wholesale Network
 
Although
in the next 5 years we will be mainly focused on accelerating digital growth and our direct-to-consumer channel, we still intend to continue
broadening customer access and strengthening our global foothold in new and existing markets by strategically expanding our wholesale
network and deepening current relationships. In all of our markets, we have an opportunity to increase sales by adding new wholesale
partners and increasing volume in existing retailers. Additionally, we are focused on strengthening relationships with our retail partners
through broader offerings, exclusive products and shop-in-shop formats, which are dedicated spaces within another company’s retail
store on a short-term rental basis. We believe our retail partners have a strong incentive to showcase our brand as our products drive
customer traffic and consistent full-price sell-through in their stores.
 
Broaden
Our Product Offering
 
Continuing
to enhance and expand our product offering represents a meaningful growth driver for Perfect Moment. We expect that broadening our product
line will allow us to strengthen brand loyalty with the existing Perfect Moment customer base, drive higher penetration in our existing
markets and expand our appeal across new geographies. We intend to continue developing our offering through the following strategies.
 
Elevate
Fall and Winter. Perfect Moment will continue to focus on quality materials and distinctive designs to create luxury products which
aim to deliver technical performance and style impact. However, believing that people want to bring the functionality of our ski apparel
into their everyday lives, Perfect Moment is broadening the product range beyond the core “on-slope” skiwear to encompass
less technical lifestyle products and a wide range of exceptional products for any occasion, including all year-round accessories.
 
Expand
Spring and Summer. We intend to continue building our successful Spring and Summer collections in categories such as surfwear, activewear,
loungewear and swimwear. We believe offering inspiring new and complementary product categories that are consistent with our values of
heritage, functionality and quality and can become part of our core business represents an opportunity to develop a closer relationship
with our customers and expand our addressable market. In June 2024, we launched an Ibiza-inspired Summer Capsule Collection across
our global eCommerce channels. The collection was highlighted in a photoshoot published in British Vogue featuring photographer, Grace
Burns, and models Stella Jones and Paloma Baygual wearing items from the collection.
 
We
believe this strategy will deliver several benefits:
 


 
●
Increased
    Revenues. We expect that cross-over into adjacent product markets will increase sales by allowing us to sell outerwear, lifestyle
    products, activewear and swimwear to non-skiers and cross-sell lifestyle and “off-slope” products to existing skiwear
    customers in a winter setting.

 
 
 

 
●
Reduced
    Seasonality. We expect that sales of new lifestyle products as well as activewear and swimwear products will be less concentrated
    in the winter months and increase revenue from new and existing customers as we grow brand awareness.

 
 
 

 
●
Improved
    Margins. We believe that our margins will be improved by this strategy as modest price increases across the existing range increase
    margins dollar for dollar. A greater use of high-margin luxury materials such as cashmere will support price and margin increases,
    while a move towards more less technically-complex lifestyle pieces will also drive margin improvement. Full price sales with limited
    promotional activity will further improve margins.

 
During
the fiscal year ended March 31, 2024, we restructured and invested in our design, product development, merchandizing and production teams
to create a pathway to execute this underpinning strategy. We launched our first spring / summer capsule encapsulating our
new strategy at the end of Q1 FY25. We plan to then gradually increase our product offering as we evaluate demand, supply and profitability.
 
Establish
Perfect Moment Owned Physical Retail
 
Perfect
Moment has grown to date without a Perfect Moment owned physical stand-alone store presence. Sales growth has been driven by our wholesale
network and online offering. As part of our growth strategy, we believe opening directly operated stores in strategically selected major
cities and pop-up stores in strategic ski resorts and high-traffic city locations would provide an excellent opportunity to generate
sales in key locations, providing a luxury in-store experience, reflecting the character of the brand and providing an experiential contact
point for customers.
 

41
 

 
As
our product range expands, we see the potential to further grow our community with a physical presence by opening directly operated stores.
We already have a physical presence in department stores, operated under wholesale arrangements. Operating Perfect Moment owned stores
would provide our community a home for the brand and act as a beacon for new or potential customers, but they also add extra complexity
and risk. In order to test our retail model, we plan to first establish pop-up locations. We evaluate each potential store location based
on lease availability and projected viability, and plan to open popups in the fiscal year ending March 31, 2025 and year-round stores
beginning the fiscal year ending March 31, 2027.
 
Segment
Reporting
 
The
Company applies ASC Topic 280, Segment Reporting, in determining reportable segments for its financial statement disclosure. The Chief
Operating Decision Maker has been identified as the Chief Executive Officer. The Company reports segments based on the financial information
it uses in assessing performance and deciding how to allocate resources. Management has determined that the Company operates in one business
segment, product sales. Key financial measures including but not limited to gross profit, Adjusted EBITDA and net loss are not reported
at a disaggregated level for wholesale and ecommerce and resource allocation decisions to the business strategy are not made based solely
on our key financial measures.
 
Geographic
Concentration
 
Although
we are organized fundamentally as one business segment, our revenue is primarily split between three geographic areas: the United States,
Europe and the United Kingdom. Customers in these regions are served by our leadership and operations teams in the United Kingdom and
our production team in Hong Kong.
 
The
table below reflects total net revenues attributed to Europe (excluding the United Kingdom), United States, United Kingdom, and the rest
of the world:
 



  
Years
    Ended 

  
March
    31, 2024  
March
    31, 2023 

  
   
  

Europe
    (excluding United Kingdom) 
$7,909  
32% 
$7,233  
 31%

United
    States 
 9,935  
 41% 
 10,348  
 44%

United
    Kingdom 
 4,845  
 20% 
 4,269  
 18%

Rest
    of the World 
 1,754  
 7% 
 1,588  
 7%

Total
    Revenues 
$24,443  
    
$23,438  
   

 
Supplier
concentration
 
In
the years ended March 31, 2024 and 2023, the largest single supplier of manufactured goods, Everich Garments Group Ltd., produced 75%
and 72%, respectively, of the Company’s products. In the years ended March 31, 2024 and 2023, the largest fabric supplier, Toray
International Inc., supplied 79% and 70%, respectively, of the fabric used to manufacture the Company’s products.
 
The
Company has contracted with additional suppliers to lower our concentration risk, improve margins, and establish better payment
terms.
 

42
 

 
Customer
concentration
 
For
the twelve months ended March 31, 2024, we had one customer that accounted for approximately 13% or $3,168 of total revenues individually
and in aggregate. There was no accounts receivable balance for this customer as of March 31, 2024. The Company has ended its
wholesale relationship with this customer as part of a broader strategy to enhance our relationships with our entire customer base. 
 
For
the twelve months ended March 31, 2023, we had one customer that accounted for approximately 12% or $2,786 of total revenues individually
and in aggregate. The related accounts receivable balance for this customer was approximately $41 as of March 31, 2023.
 
Key
Financial Measures
 
We
use the following US GAAP and non-US GAAP financial measures to assess the progress of our business, make decisions on where to allocate
time and investment and assess then near-term and longer-term performance of our business:
 


  
Years ended  March 31, 

  
2024  
2023 

  
(unaudited)  
(unaudited) 

(Amounts in thousands, except percentages) 
   
  

Key Financial Measures 
    
   

Net revenue 
    
   

Wholesale 
$14,060  
$14,888 

Ecommerce 
 10,383  
 8,550 

Total net revenue 
 24,443  
 23,438 

Gross profit 
 9,231  
 8,756 

Gross margin (1) 
 37.8% 
 37.4%

Loss from operations 
 (7,675) 
 (8,625)

Net loss 
$(8,722) 
$(10,305)

Adjusted EBITDA (2) 
$(5,932) 
$(2,520)

 


(1)
Gross
    margin is defined as gross profit as a percentage of total net revenue.

 
 

(2)
We
    define “Adjusted EBITDA” as net loss excluding interest expense, income tax benefit (expense), depreciation and amortization
    and stock-based compensation expense. Adjusted EBITDA is a measure that is not defined in US GAAP. For further information about
    how we calculate Adjusted EBITDA, the limitations of its use and a reconciliations to the most comparable US GAAP measure.

 
Results
of Operations
 
The
following table sets forth our results of operations for the years ended March 31, 2024 and 2023.
 



  
Years ended  March 31,  
  

  
2024  
2023  
Change 

  
   
   
  

(Amounts in thousands) 
    
    
   

Statements of operations data: 
    
    
   

Net revenue 
    
    
   

Wholesale 
$14,060  
$14,888  
$(828)

Ecommerce 
 10,383  
 8,550  
 1,833 

Total Revenue 
 24,443  
 23,438  
 1,005 

Cost of goods sold 
 15,212  
 14,682  
 530 

Gross profit 
 9,231  
 8,756  
 475 

Operating expenses 
    
    
   

Selling, general and administrative expenses 
 12,122  
 12,369  
 (247)

Marketing and advertising expenses 
 4,784  
 5,012  
 (228)

Total operating expenses 
 16,906  
 17,381  
 (475)

Loss from operations 
 (7,675) 
 (8,625) 
 950 

Interest expense 
 (1,311) 
 (1,840) 
 529 

Foreign currency transactions gains 
 264  
 39  
 225 

Loss before income taxes 
 (8,722) 
 (10,426) 
 1,704 

Income tax benefit 
 -  
 121  
 (121)

Net Loss 
 (8,722) 
 (10,305) 
 1,583 

Other comprehensive (losses) gains 
    
    
   

Foreign currency translation (losses) gains 
 (288) 
 303  
 (591)

Comprehensive loss 
$(9,010) 
$(10,002) 
$992 

 

43
 

 
Revenue
 
Total
revenue for the year ended March 31, 2024, was $24,443 compared to $23,438 for the year ended March 31, 2023, an increase of $1,005 or
4.3%. The increase is primarily attributed to an increase in ecommerce revenue of $1,833 or 21.4% versus the prior year. The increase
in ecommerce is attributed to our continued focus of enhancing brand awareness to drive ecommerce sales. The overall increase is offset
by a decrease in wholesale revenue of $828 or 5.6%. The decrease is attributed to higher purchases from our wholesale customers
in fiscal year 2023 due to the post Covid rebound.
 
Cost
of goods sold
 
Cost
of goods sold for the year ended March 31, 2024 was $15,212 compared to $14,682 for the year ended March 31, 2023, an increase
of $530 or 3.6%. The change in cost of goods sold is primarily attributed to an increase in revenues.
 
Gross
profit and gross margin
 
Our
gross profit for the year ended March 31, 2024 was $9,231 compared to $8,756 for the year ended March 31, 2023, an increase
of $475 or 5.4%.
 
Our gross margins were 37.8%
and flat compared to the 37.4% achieved in the prior year. The increase was primarily attributed to strategic changes in ecommerce driven by less discounting and improvements
in the supply chain with Global-E, offset by a decrease in wholesale margin as well as a shift in revenue to lower margin ecommerce revenue.

 
We
anticipate our ecommerce margins to surpass wholesale margins in FY26.
 
Selling,
general and administrative expenses (“SG&A”)
 
SG&A
expenses consist of personnel related expenses, stock compensation expense, legal and professional fees, depreciation and amortization
and other selling, general and administrative expenses, including information technology, property related expenses, travel and product
sample costs.
 
SG&A
expenses for the year ended March 31, 2024 were $12,122 compared to $12,369 for the year ended March 31, 2023, a decrease
of $247 or 2.0%. The decrease is primarily attributed to a decrease in stock compensation expense of $3,297 offset by
an increase in labor of $965 to support growth and the listing on NYSE American, plus increases in legal $354, travel $269, audit fees
$214, commissions $179, customer bankruptcies $178, postage $166, design samples $161, information technology $128, and insurance costs
$116.
 
Marketing
and advertising expense
 
Marketing
and advertising expenses for the year ended March 31, 2024 were $4,784 compared to $5,012 for the year ended March 31, 2023, a
decrease of $228 or 4.6%. The decrease is primarily attributed to a decrease in stock based expenses of $1,483 offset by
investments in brand awareness totaling $1,255 to drive ecommerce revenues and sell-through, which included a collaboration with
Soho House that included participating in the grand opening of their Portland Soho House, Verbier advertising and events,
photoshoots, and digital marketing.
 
FY24
| April 1, 2023 – March 3, 2024 Key Metrics
 

●Total
                                            Global unique visitors per month (“UVPM”) (Digital): 8,005,510,160

●Total
                                            Global Circulation (Print): 100,888,018

●Total
                                            PR Value of Print & Digital Coverage (Not Social): $30,979,755.00

 

44
 

 
Marketing
and Brand Highlights – Ski Season Q3 & Q4
 


 
●
The total social audience reached by content posted
    by global key opinion leaders (KOLs)1 about Perfect Moment was more than 296.6 million during the period. This represents
    the total combined followers of the celebrities, influencers, models, media publications, and fashion industry notables who organically
    posted about the brand during the quarter globally.

 
 
 

  
●
The
    total UVPM reached more than 7.5 billion during the period. This is the combined sum of UVPM reached by all global
    digital media coverage achieved during the quarter. 

 
 
 

  
●
Hosted
    several brand events across the U.S. and Europe that included top fashion models and social media influencers with collective reach
    of more than 71 million followers.

 
 
 

  
●
Received
    broad media coverage during the quarter, including features in both US and British Vogue, Esquire, ELLE, Harper’s BAZAAR, Forbes,
    WWD, Travel & Leisure, WhoWhatWear and accolades from Condé Nast Traveler, Town & Country, NY Magazine, Glamour, Evening
    Standard, GQ, Rolling Stone, and Haute Living Magazine (LA and Miami).

 
 
 

 
●
Marfa
    Stance & Perfect Moment collaborated to create a 4-piece buildable and adaptable capsule collection comprising of two jacket
    styles and two accessories. The exclusive collection was gifted globally and received recognition in three separate stories by British
    Vogue reaching more than 3 million digital readers per month.

 
 
 

  
●
Featured
    on the front cover of Modern Luxury Aspen’s Holiday 2023/Winter 2024 issue, featuring model Kate Love wearing exclusively Perfect
    Moment. Included an eight-page fashion feature with Kate Love styled in Perfect Moment’s autumn/winter 2023 (AW23) collection,
    and a two-page profile feature with Jane Gottschalk our Chief Creative Officer. As the top luxury fashion publication in Aspen, Modern
    Luxury Aspen has 50,000 print subscribers and more than 1.1 million digital readers per month.

 
Note1:
The company defines a key opinion leader (KOL) as a person who is considered an expert on a certain topic and whose opinions are
respected by the public due to their trajectory and the reputation they have built. They are typically identified by their reach, social
media following and stature. KOL may include but is not limited to celebrities, social media influencers, fashion models, contributors
to media publications, and noted members of the fashion industry. There is no official listing or accreditation of KOLs, so the term
is subjective, and therefore the list and definition may vary from company to company. The source of the KOLs, social media and audience
reach statistics provided in this release are reports by the company’s public relations firm. No reliance should be made upon their
accuracy or timeliness.
 
Foreign
currency transactions gains
 
Foreign
currency transactions gains increased by $225, from $39 for the year ended March 31, 2023, to $264 for the year ended March 31, 2024,
mainly driven by fluctuations in the U.S. dollar to the U.K. pound sterling exchange rate.
 
Foreign
currency translation gains (losses)
 
Foreign
currency translation gains (losses) result from the process of translating the financial statements of our foreign entities’ functional
currency into USD. Foreign currency translation losses decreased unfavorably by $591, a gain of $303 during the year ended March 31,
2023 to a loss of $288 during the year ended March 31, 2024, mainly driven by fluctuations in the US dollar to the UK pound sterling
exchange rate.
 
Use
of Non-GAAP Measures - Adjusted EBITDA
 
In
addition to our results under generally accepted accounted principles (“GAAP”), we present Adjusted EBITDA as a supplemental
measure of our performance. However, Adjusted EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative
to net income, income from operations or any other performance measure derived in accordance with GAAP or as an alternative to cash flow
from operating activities as a measure of liquidity. We define Adjusted EBITDA as net income (loss), plus interest expense, depreciation
and amortization and stock-based compensation.
 

45
 

 
Management
considers our core operating performance to be that which our managers can affect in any particular period through their management of
the resources that affect our underlying revenue and profit generating operations in that period. Non-GAAP adjustments to our results
prepared in accordance with GAAP are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them
appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that
are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed
as an inference that our future results will be unaffected by unusual or non-recurring items.
 


  
For the Years ended 

  
March 31, 2024  
March 31, 2023 

  
   
  

Net income / (loss), as reported 
$(8,722) 
$(10,305)

  
    
   

Adjustments: 
    
   

Interest expense 
 1,311  
 1,840 

Stock compensation expense 
 739  
 4,036 

Amortization of stock-based marketing services 
 185  
 1,483 

Depreciation and amortization 
 555  
 547 

Income tax benefit 
 -  
 (121)

Total EBITDA adjustments 
    
   

Adjusted EBITDA 
$(5,932) 
$(2,520)

 
The
$3,412 decrease in Adjusted EBITDA for the year ended March 31, 2024 compared to the same period in 2023, was primarily driven
by an increase in investments in brand awareness totaling $1,255 to drive ecommerce revenues and wholesale sell-through, which included
a collaboration with Soho House,  Verbier advertising and events, an increase in labor of $965 to support growth and
listing on NYSE American, plus increases in legal $354, travel $269, audit fees $214, commissions $179, customer bankruptcies $178, postage
$166, design samples $161, information technology $128, and insurance costs $116, offset by an increase in gross profit of
$475.
 
We
present adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on
a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted
EBITDA in developing our internal budgets, forecasts, and strategic plan; in analyzing the effectiveness of our business strategies in
evaluating potential acquisitions; and in making compensation decisions and in communications with our board of directors concerning
our financial performance. Adjusted EBITDA has limitations as an analytical tool, which includes, among others, the following:
 


 
●
Adjusted
    EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

 
 
 

 
●
Adjusted
    EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

 
 
 

 
●
Adjusted
    EBITDA does not reflect future interest expense, or the cash requirements necessary to service interest or principal payments, on
    our debts; and

 
 
 

 
●
Although
    depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in
    the future, and the Adjusted EBITDA does not reflect any cash requirements for such replacements.

 

46
 

 
Seasonality
and Quarterly Trends
 
Our
business is seasonal with revenue concentrated in northern hemisphere countries. Revenue is elevated in the quarters ending
September 30, December 31 and March 31 driven by sales of ski and outerwear through the fall and winter months. In the
quarter ending June 30 sales are driven by swimwear and activewear. Our growth rate fluctuates quarter-on-quarter as a result of the
seasonality of our business. We expect this fluctuation to continue. In addition to seasonality, quarter-on-quarter results are
expected to be impacted by the timing of goods production and delivery, promotional activities and the addition of new
products and geographies as the business grows. The business is also subject to the impact of economic cycles that influence retail
apparel trends.
 
Liquidity
and Capital Resources
 
As
of March 31, 2024, we had cash and cash equivalents of $7,910 and an accumulated deficit of $48,977. Historically, Perfect Moment has
generated negative cash flows from operations and has primarily financed its operations through private sales of equity securities, debt
and working capital finance. Overall, cash and cash equivalents and restricted cash, in aggregate, increased by $3,198 million, from
$4,712 million as of March 31, 2023 to $7,910 million as of March 31, 2024. This increase is primarily due to net proceeds from financing
activities totaling $8,162 from the sale of our common stock offset by net cash used in operating activities totaling $4,453.
 
During
May 2023 to August 2023, the Company issued and sold 409,050 shares of common stock to accredited investors in an equity financing at
a purchase price of $6.00 per share for an aggregate consideration of $2,179, net of broker fees and expenses of approximately $275.
 
On
February 7, 2024, the company entered into an underwriting agreement with ThinkEquity LLC, as representative (the “Representative”)
of the several underwriters identified therein, relating to the Company’s initial public offering (the “IPO”) of 1,334,000
shares of the Company’s common stock, par value $0.0001 per share. The Company previously filed the form of underwriting agreement
as an exhibit to the Company’s registration statement on Form S-1, as amended from time to time (File No. 333-274913), which was
declared effective by the Securities and Exchange Commission on February 7, 2024. The price per share to the public was $6.00 generating
gross proceeds of $8,004. The Company also granted the Underwriters a 45-day option to purchase up to 200,100 additional shares of Common
Stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the IPO.
 
The
number of shares of common stock outstanding after this offering was 15,578,449 as of February 7, 2024, that included the previously
issued and outstanding of 5,233,402, the 1,334,000 shares issued as part of this offering plus (i) the automatic conversion of all outstanding
shares of our Series A convertible preferred stock into 5,323,782 shares of common stock, (ii) the automatic conversion of all outstanding
shares of our Series B convertible preferred stock into 1,189,998 shares of common stock and (iii) the automatic conversion, in connection
with the closing of this offering (closing on February 12, 2024), of $10,002 in principal amount plus accrued interest in the amount
of $1,985 under our 8% senior subordinated secured convertible promissory notes (the “2021 Notes”) and our 8% senior subordinated
secured convertible promissory notes (the “2022 Notes” and, together with the 2021 Notes, the “Notes”), at 80%
of the initial public offering price into an aggregate of 2,497,267 shares of common stock.
 
On
February 12, 2024, the Company consummated the IPO and issued 1,334,000 shares of Common Stock for aggregate net proceeds of approximately
$6,009, after deducting underwriting discounts and commissions and estimated offering expenses. The Company intends to use the
proceeds for general corporate purposes, including working capital, sales and marketing activities and general and administrative matters.
Concurrently with the closing of the IPO, the Company also issued warrants to purchase up to 66,700 shares of Common Stock to the Representative
and its designees, at an exercise price of $7.50 per share (the “Underwriter Warrants”). The Underwriter Warrants are exercisable
beginning on August 5, 2024, and expire on February 7, 2029.
 
On
March 15, 2021, the Company entered into a securities purchase agreement with accredited investors pursuant to which it issued 8% Secured
Convertible Promissory Notes (also referred to herein as the “2021 Notes”) with an aggregate principal amount of $6.0 million
(such financing, the “2021 Debt Financing”). During April to July 2022, further 8% Secured Convertible Promissory Notes (also
referred to herein as the “2022 Notes” and, together with the 2021 Notes, the “Notes”), that rank pari passu
to the original convertible debt financing, were issued to accredited investors with an aggregate principal amount of $4.00 million (such
financing, the “2022 Debt Financing”). The maturity date for the Notes issued in the 2021 Debt Financing and the 2022 Debt
Financing is February 15, 2024. The outstanding balance of the Notes will convert automatically upon the closing of a firm commitment
underwritten public offering of our common stock with aggregate gross proceeds of at least $8.0 million and simultaneous listing on a
national stock exchange (such transaction, a “Qualified IPO”), at a conversion price equal to 80% of the offering price to
the public in such Qualified IPO.
 

47
 

 
On
February 12, 2024, $10,002 in principal amount plus accrued interest in the amount of $1,985 automatically converted into Company common
stock, at 80% of the initial public offering price into an aggregate of 2,497,267 shares of common stock (see Note 13 of the financial
statements).
 
The
Company, through PMA, has a trade finance facility extended on goods for which letters of credit are issued to the Company’s suppliers
by HSBC. As of March 31, 2024 and March 31, 2023, the outstanding balance under the trade finance facility was $0 and $26, respectively,
and the Company had an available trade finance facility of $5.00 million. As of March 31, 2024, there were no outstanding pledged letters
of credit by HSBC. The trade finance facility does not become the Company’s responsibility until the Company receives the manufactured
clothing goods from suppliers. Once drawn, the company has 120 days credit on the loan before repayment is due. For drawings in Hong
Kong dollars, the interest rate equals HIBOR plus 3.0%, and for drawings in U.S. dollars, the interest rate equals SOFR plus 3.3%. The
trade finance facility was originally secured by a standby documentary credit for $1.0 million from UBS Switzerland AG and a personal
guarantee to the value of $4.0 million from the Chairman of our board of directors, Max Gottschalk, and a 3,150 corporate guarantee
from Perfect Moment (UK) Limited. The UBS standby documentary credit expired on April 30, 2023 and the facility was then secured
by charge over cash deposits equal to the amount of the facility used at any given moment in time in addition to the aforementioned personal
and corporate guarantees. On May 31, 2023, the UBS standby documentary credit was reinstated for $1.0 million, which standby
documentary credit was secured by a guarantee from Joachim Gottschalk & Associates, Ltd. (“JGA”). The UBS standby
documentary credit was extended on November 26, 2023 through January 26, 2024 at a 10% interest rate. The JGA guarantee is in addition
to the $4.0 million personal guarantee of the trade finance facility by Mr. Gottschalk. The UBS standby documentary credit was not
extended and the 3,150 corporate guarantee from Perfect Moment (UK) Limited was replaced with a 2,000 corporate guaranteed from Perfect
Moment, Limited.
 
The
JGA guarantee accrued interest  between 8% and 10% per annum, payable by the Company. The interest charged for the twelve months
ended March 31, 2024 was $56. During the year ended March 31, 2024, the Company utilized $1,847 of borrowings under the facility, all
of which was repaid by March 31, 2024. The trade finance facility is also secured by a guarantee by Perfect Moment Ltd. in the amount
of $2.0 million. 
 
We
expect operating losses and negative cash flows from operations to continue into the foreseeable future as we continue to invest in growing
our business and expanding our infrastructure. Our primary uses of cash include personnel and marketing expenditures, inventory, capital
investment and expenditures in technology and incremental expenses arising from distribution center operating costs to support our operations
and our growth.
 
As
of March 31, 2024, our cash and cash equivalents and restricted cash are mainly held in U.S. dollar, U.K. pound sterling, Hong Kong dollar,
and euro cash accounts with high credit quality financial institutions. As a result of the seasonality of our business, we typically
draw down on our trade finance facilities during summer, fall and early winter to meet a large proportion of the cost of goods associated
with the manufacture of our fall/winter collection. Trade finance and debt factoring facilities support our working capital cycle through
to the late fall/winter season when wholesale receivables are paid and ecommerce revenues increase.
 
Our
ability to fund inventory, capital expenditures, and growth will depend on our ability to generate cash in the future. Our future ability
to generate cash from operations is, to a certain extent, subject to general economic, financial, competitive, regulatory and other conditions.
Based on our current level of operations, we believe our existing cash balances and expected cash flows from operations, alongside the
continuance of our existing financing arrangements, will be sufficient to meet our operating requirements for at least the next 12 months,
excluding financing to support production (i.e. timing of working capital). We may seek additional or alternative debt and equity financing
to that set out above. If we raise equity financing, our shareholders may experience significant dilution of their ownership interests.
If we conduct additional debt financing, the terms of such debt financing may be similar or more restrictive that the terms of our current
financing arrangements and we would have additional debt service obligations. In the event that additional financing is required from
outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when
desired, our business, financial condition and results of operations could be harmed. See the sections below titled “Risk Factors
– Risks Related to Ownership of Our Common Stock – Future sales and issuances of our common stock or rights to purchase common
stock, including pursuant to our 2021 Equity Incentive Plan, could result in additional dilution of the percentage ownership of our stockholders”
and “Risk Factors – Risks Related to Our Business, Our Brand, Our Products and Our Industry – We have a history of
losses, expect to continue to incur losses in the near term and may not achieve or sustain profitability in the future, and as a result,
our management has identified and our auditors reported that there is a substantial doubt about our ability to continue as a going concern.”
 

48
 

 
The
report of our independent registered public accounting firm that accompanies our audited consolidated financial statements contains for
the fiscal years ended March 31, 2024 and March 31, 2023, includes a going concern explanatory paragraph in which such firm expressed
that there is substantial doubt about our ability to continue as a going concern. Our consolidated financial statements contained in
this Annual Report do not include any adjustments that might result if we are unable to continue as a going concern. If we are unable
to continue as a going concern, holders of our securities might lose their entire investment. As discussed above, although we plan to
attempt to raise additional capital through one or more private placements or public offerings, the doubts raised relating to our ability
to continue as a going concern may make our shares an unattractive investment for potential investors. These factors, among others, may
make it difficult to raise any additional capital and may cause us to be unable to continue to operate our business.
 
The
following table shows summary consolidated cash flow information for the periods presented:
 


  
Years ended March 31, 

  
2024  
2023 

  
   
  

(Amounts in thousands) 
    
   

Consolidated statement of cash flow data: 
    
   

Net cash used in operating activities 
$(4,453) 
$(3,510)

Net cash used in investing activities 
 (211) 
 (249)

Net cash provided by financing activities 
$8,162  
$6,930 

 
Cash
Flows from Operating Activities
 
During
the year ended March 31, 2024, operating activities used $4,453 in cash and cash equivalents primarily resulting from a net loss of $8,722,
offset by non-cash charges of $3,167 and a net cash inflow from changes in operating assets and liabilities of $1,102.
 
The
changes in operating assets and liabilities during the year ended March 31, 2024 consisted primarily of a $1,304 increase in accrued
expenses, a $295 increase in trade payables, and a $240 increase in unearned revenue, offset by a
$349 increase in inventory, a $238 increase in accounts receivable, a $219 increase in
prepaid expense and other current assets, and a $106 decrease in operating leases.
 
During
the year ended March 31, 2023, operating activities used $3,510 in cash and cash equivalents, primarily resulting from a net loss of
$10,305, offset by non-cash charges of $8,555 and a net cash outflow from changes in operating assets and liabilities of $1,760.
 
The
changes in operating assets and liabilities during the year ended March 31, 2023 consisted primarily of a $812 increase in inventories,
$759 decrease in accounts payables, a $519 increase in trade receivables, and a $515 decrease in unearned revenue, offset
by a $514 increase in accrued expenses, and a $321 decrease in prepaid and other current assets.
 
Cash
Flows from Investing Activities
 
Cash
used in investing activities was $211 in the year ended March 31, 2024 and $249 in the year ended March 31, 2023, a decrease of $38,
primarily due to a reduction of software and website development capital expenditures.
 
Cash
Flows from Financing Activities
 
Net
cash obtained from financing activities during the year ended March 31, 2024 was $8,162, resulting from $6,009 in net proceeds
from our initial public offering, $2,179 in net proceeds from the issuance of common shares and $1,847 in net proceeds from trade finance
facilities, offset by $1,873 in repayment of trade finance facilities.
 

49
 

 
Net
cash obtained from financing activities during the year ended March 31, 2023 was $6,930, primarily attributed to net proceeds from the
issuance of Series B preferred stock totaling $5,200, net proceeds from debt financing totaling $2,555, offset by the repayment of shareholder
loans of $565 and repayment of trade finance facilities of $239.
 
Off-Balance
Sheet Arrangements
 
We
did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships
with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose
entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited
purposes.
 
Critical
Accounting Policies and Estimates
 
Our
management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial
statements, which have been prepared in accordance with U.S. GAAP. The preparation of those consolidated financial statements requires
our management to make judgments and estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the consolidated financial statements, as well as the reported revenue generated, and expenses
incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe
are reasonable under the circumstances, the results of which form the basis for making judgements about the carrying value of asset and
liabilities that are not readily apparent from other sources. Significant estimates inherent in the preparation of the consolidated financial
statements include reserves for uncollectible accounts receivables; realizability of inventory; customer returns; useful lives and impairments
of long-lived tangible and intangible assets; accounting for income taxes and related uncertain tax positions; and the valuation of stock-based
compensation awards. Actual results may differ from these judgements and estimates under different assumptions or conditions and any
such differences may be material.
 
We
believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies
relate to the more significant areas involving management’s judgements and estimates.
 
Revenue
recognition
 
The
majority of the Company’s revenue is recognized at a point in time based on the transfer of control. In addition, the majority
of the Company’s contracts do not contain variable consideration and contract modifications are minimal. The majority of the Company’s
revenue arrangements generally consists of a single performance obligation to transfer promised goods. Revenue is reported net of markdowns,
discounts and sales taxes collected from customers on behalf of taxing authorities. Revenue is also presented net of an allowance for
expected returns where contracts include the right of return.
 
We
estimate returns on an ongoing basis to estimate the consideration from the customer that we expect to ultimately receive. Consideration
in determining our estimates for returns may include agreements with customers, the Company’s return policy and historical and
current trends. We record the returns as a reduction to net sales in our consolidated statements of operations and the recognition of
a provision for returns within accrued expenses in our consolidated balance sheets and the estimated value of inventory expected to be
returned as an adjustment to inventories, net.
 
Revenue
is comprised of direct-to-consumer ecommerce revenue through the Company’s website and revenue related to wholesalers.
 
Revenue
is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers.
Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product.
This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. For direct-to-consumer
ecommerce revenue, the Company receives payment before the customer receives the promised goods. Revenue is only recognized once the
goods have been delivered to the customer. Sales to wholesale customers are recognized when the customer has control which will depend
on the agreed upon International Commercial Terms (“inco-terms”). For inventories sold on consignment to wholesalers, the
Company records revenue when the inventory is sold to the third-party customer by the wholesaler. The Company may issue merchant credits,
which are essentially refund credits. The merchant credits are initially deferred and subsequently recognized as revenue when tendered
for payment.
 

50
 

 
The
Company’s business is significantly affected by the pattern of seasonality common to most retail apparel businesses. Historically,
the Company has recognized a significant portion of its revenue in the fourth fiscal quarter of each year as a result of increased net
revenue during the ski season.
 
Accounts
receivable
 
Accounts
receivable primarily arise out of sales to wholesale accounts and ecommerce partners. The allowance for doubtful accounts represents
management’s best estimate of probable credit losses in accounts receivable using the incurred loss methodology. Receivables are
written off against the allowance when management believes that it is probable the amount receivable will not be recovered. Additionally,
the Company records higher allowances in the first and third quarters following its peak sales seasons after the Company determines it
to be probable that it will not collect the related receivables.
 
Inventories
 
Inventories,
consisting of finished goods, inventories in transit, and raw materials, are initially recognized at cost and subsequently measured at
the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis and is comprised of all costs of purchases,
costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
 
The
Company periodically reviews its inventories and makes a provision as necessary to appropriately value goods that are obsolete, have
quality issues, or are damaged. The amount of the provision is equal to the difference between the cost of the inventory and its net
realizable value based upon assumptions about product quality, damages, future demand, selling prices, and market conditions. If changes
in market conditions result in reductions in the estimated net realizable value of its inventory below its previous estimate, the Company
would increase its provision in the period in which it made such a determination.
 
In
addition, the Company provides for inventory shrinkage based on historical trends from actual physical inventory counts. Inventory shrinkage
estimates are made to reduce the inventory value for lost or stolen items. The Company performs a physical inventory at least count once
a year and adjusts the shrinkage reserve accordingly.
 
Stock-based
compensation
 
The
Company maintains the 2021 Plan, which provides for the grant of incentive stock options, non-statutory stock options, stock appreciation
rights, restricted stock awards, restricted stock units and performance units and performance shares to employees, directors and consultants
of the Company or any parent or subsidiary of the Company. The purpose of the 2021 Plan is to enable the Company to attract and retain
the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors and
consultants of the Company or any parent or subsidiary of the company, and to promote the success of the Company’s business. The
Company has historically granted stock options to non-employees in exchange for the provision of services, both under the 2021 Plan and
outside of the 2021 Plan.
 
The
Company accounts for such awards based on ASC 505 and 718, whereby the value of the award is measured on the date of grant and recognized
as compensation expense on a straight-line basis over the vesting period. The Company measures fair value as of the grant date for options
and warrants using the Black Scholes option pricing model and for common share awards using a weighted average of the Black Scholes method
and probability-weighted expected return method (PWERM).
 

51
 

 
The
inputs into the Black Scholes option pricing model are subjective and generally require significant judgment. The fair value of the shares
of common and preferred stock has historically been determined by the Company’s management with the assistance of third-party specialists
as there was no public market for the common stock. The fair value is obtained by considering a number of objective and subjective factors,
including the valuation of comparable companies, sales of preferred stock to unrelated third parties, projected operating and financial
performance, the lack of liquidity of common and preferred stock and general and industry specific economic outlook, amongst other factors.
The expected term represents the period that the Company’s stock options are expected to be outstanding and is determined using
the simplified method (based on the mid-point between the vesting date and the end of the contractual term) as the Company’s stock
option exercise history does not provide a reasonable basis upon which to estimate expected term. Because the Company is privately held
and does not have an active trading market for its common and preferred stock for a sufficient period of time, the expected volatility
was estimated based on the average volatility for comparable publicly traded companies, over a period equal to the expected term of the
stock option grants. The risk-free rate assumption is based on the U.S. Treasury zero coupon issues in effect at the time of grant for
periods corresponding with the expected term of the option. The Company has never paid dividends on its common stock and does not anticipate
paying dividends on common stock in the foreseeable future. Therefore, the Company uses an expected dividend yield of zero.
 
Recent
Accounting Pronouncements
 
For
recent accounting pronouncements, see Note 2 of our audited consolidated financial statements included in this Annual Report.
 
Quantitative
and Qualitative Disclosures about Market Risk
 
We
are exposed to market risks in the ordinary course of our business. These risks primarily include:
 
Interest
rate risk
 
The
fair value of our cash equivalents, held primarily in cash deposits, have not been significantly impacted by increases or decreases in
interest rates to date, due to the short-term nature of these instruments. The interest expense associated with our letter of credit
trade finance facility and debt factoring facilities are composed of a fixed spread over HIBOR or SOFR. The fee associated with revenue
financing is fixed and the interest rate on our convertible bridge loan is accrued at a fixed rate also. We are exposed to interest rate
risk where the interest expense associated with our financing arrangements is depending upon HIBOR or SOFR, a floating reference rate,
or in the event that the fixed interest rate associated with our financing arrangements is increased upon roll-over of the financing
arrangement at its contractual maturity. Fluctuations in interest rates have not been significant to date. We do not expect that interest
rates will have a material impact on our results of operations, owing to the size and short-term nature of the floating rate financing
arrangements.
 
Inflation
risk
 
We
are beginning to observe increases in our costs of goods sold, in particular, transportation costs. If these cost increases are sustained
and we become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability to do
so could harm our business, results of operations or financial condition.
 
Foreign
exchange risk
 
To
date, revenue has primarily been generated in U.S. dollar, U.K. pound sterling and euro. As a result, our revenue may be subject to fluctuations
due to changes in foreign currency exchange rates, particularly changes in U.K. pound sterling and euros relative to the U.S. dollar.
Our foreign exchange risk is less pronounced for our cost of sales as to our cost of goods sold being predominantly U.S. dollar denominated.
Our selling, general and administrative expenses are primarily made up of U.S. dollar, Hong Kong dollar, U.K. pound sterling and euro
amounts. Although a portion of our non-U.S. dollar costs offset non-U.S. dollar revenue, a currency mismatch arises as to the amount
and timing of our different currency cash flows. To date, we have not hedged our foreign currency exposure. We will continue to monitor
the impact of foreign exchange risk and review whether to implement a hedging strategy to minimize this risk in future accounting periods.
Hedging strategies where implemented, are unlikely to completely mitigate this risk. To the extent that foreign exchange risk is not
hedged it may result in harm to our business, results of operations and financial condition.
 

52
 

 
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not
applicable.
 
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
Reference
is made to the financial statements, which begin on page F-1 of this Annual Report.
 
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
None.
 
ITEM
9A. CONTROLS AND PROCEDURES
 
Evaluation
of Disclosure Controls and Procedures
 
We
maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our reports under
the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms,
and that such information is accumulated and communicated to our management, including our principal executive officer and our principal
financial officer, as appropriate, to allow timely decisions regarding required disclosure.
 
We
carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer
and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-
15(e) under the Exchange Act) as of the period covered by this Annual Report. Based on this evaluation, our principal executive officer
and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2024.
 
Management’s
Report on Internal Controls Over Financial Reporting
 
This
Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial
reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules
of the SEC for newly public companies.
 
Changes
in Internal Control Over Financial Reporting
 
There
were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
 
Inherent
Limitations on the Effectiveness of Controls
 
Management
does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all
errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective
control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error
or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.
 
These
inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a
simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people,
or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become
inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
 

53
 

 
ITEM
9B. OTHER INFORMATION
 
Insider
Trading Arrangements
 
During
the three months ended March 31, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the
Exchange Act) adopted
or terminated
a “Rule 10b5-1 trading arrangement”
or a “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408(a) of Regulation S-K under the Exchange Act.
 
ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
 


(a)
Not applicable.

 
 

(b)
Not applicable.

 
PART
III
 
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
Executive
Officers and Directors
 
The
following table sets forth the names, ages and positions of our current executive officers and directors:
 


Name
 
Age
 
Position

Executive
    Officers
 
 
 
 

Mark
    Buckley 
 
43
    
 
Chief
    Executive Officer and Director 

Jeff
    Clayborne 
 
53
    
 
Chief
    Financial Officer 

Jane
    Gottschalk 
 
51
    
 
Chief
    Creative Officer and Director 

Non-Executive
    Directors
 
 
 
 

Max
    Gottschalk 
 
52
    
 
Chairman
    of the Board of Directors 

Andre
    Keijsers 
 
58
    
 
Director
    

Berndt
    Hauptkorn 
 
56
    
 
Director
    

Tracy
    Barwin 
 
45
    
 
Director
    

Tim
    Nixdorff 
 
39
    
 
Director
    

 
Directors
are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Directors are
elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until the expiration of the term for which
he or she was elected and until a successor has been elected and qualified.
 
A
majority of the authorized number of directors constitutes a quorum of the board of directors for the transaction of business. The directors
must be present at the meeting to constitute a quorum. However, any action required or permitted to be taken by the board of directors
may be taken without a meeting if all members of the board of directors individually or collectively consent in writing to the action.
 
Executive
officers are appointed by the board of directors and serve at its pleasure.
 
Executive
Officers
 
Mark
Buckley –Chief Executive Officer and Director
 
Mr.
Buckley has served as our Chief Executive Officer and as a member of our board of directors since November 2022. Mr. Buckley also served
as our acting Chief Financial Officer from November 2022 until October 2023. Since November 2022, he has also served as the Chief Financial
Officer or PMUK, and since January 2023, he has also served as the Chief Financial Officer of PMA. Since August 2022, he has also been
serving as a director at 3rd Rock Private Limited, a rock-climbing clothing company based in the United Kingdom. From February 2020 to
October 2022, Mr. Buckley served as Chief Financial Officer of Rapha Racing Limited, a producer and retailer of cycling clothing, where
he served as Finance Director from October 2016 to February 2020 prior to becoming the Chief Financial Officer. From October 2011 to
October 2016, Mr. Buckley worked at Burberry Limited, the global luxury brand, where he held various roles before becoming the Director
of Financial Planning Analysis in April 2015. Before that, from April 2000 to October 2011 Mr. Buckley worked at Marks and Spencer Group
plc, a major British multinational retailer, including a 17-month secondment to Woolworths in South Africa. Mr. Buckley qualified as
an accountant in 2004 from the Association of Chartered Certified Accountants. We believe that Mr. Buckley is qualified to serve as a
member of our board of directors due to the perspective and experience he brings as our Chief Executive Officer and former acting Chief
Financial Officer.
 

54
 

 
Jeff
Clayborne – Chief Financial Officer
 
Mr.
Clayborne has served as our Chief Financial Officer since October 2023. Since July 2023, Mr. Clayborne has served as a financial advisor
at Healthy Extracts Inc. From March 2022 to March 2023, Mr. Clayborne served as Chief Financial Officer of SONDORS, Inc., where he prepared
the company for a Nasdaq listing; facilitated the hiring of the senior management team, brought accounting in-house, eliminated material
control weaknesses, negotiated all supply chain contracts, established a human resource function, and negotiated bridge financing. From
March 2023 to June 2023, Mr. Clayborne served as a financial advisor at SONDORS, Inc. Mr. Clayborne served as Chief Financial Officer
and Treasurer of Verb Technology Company, Inc. (Nasdaq: VERB, VERBW) from July 2016 to January 2022, where he facilitated an uplist from
the OTCQB Markets Group to Nasdaq and the acquisition and integration of Sound Concepts Inc., participated in various equity and debt
financings, built out the finance and accounting teams, and implemented NetSuite. Mr. Clayborne served as Chief Financial Officer of
and a consultant with Breath Life Healing Center from August 2015 to July 2016. From September 2014 to August 2015, he served as Vice
President of Business Development of Incroud, Inc and from May 2012 to September 2014, Mr. Clayborne served as President of Blast Music,
LLC. Prior to this, Mr. Clayborne was employed by Universal Music Group where he served as Vice President, Head of Finance & Business
Development for Fontana, where he managed the financial planning and analysis of the sales and marketing division and led the business
development department. He also served in senior finance positions at The Walt Disney Company, including Senior Finance Manager at Walt
Disney International, where he oversaw financial planning and analysis for the organization in 37 countries. Mr. Clayborne began his
career as a CPA at McGladrey & Pullen LLP (now, RSM US LLP), then at KPMG Peat Marwick (now, KPMG). He brings with him more than
25 years of experience in all aspects of strategy, finance, business development, negotiation, and accounting. Mr. Clayborne earned his
Master of Business Administration from the University of Southern California, with high honors, and his Bachelor of Science in Accountancy
from Northern Illinois University.
 
Jane
Gottschalk – Chief Creative Officer and Director
 
Ms.
Gottschalk has served as our Chief Creative Officer since September 2022, as a member of our board of directors since March 2021 and
as a member of PMA’s board of directors since May 2012. From July 2017 to September 2022, Ms. Gottschalk served as the Creative
Director of PMUK, and since September 2022, Ms. Gottschalk has served, and is serving, as the Chief Creative Officer of PMUK. From May
2012 to September 2022, she served as Creative Director of PMA, and since September 2022, she has served, and is serving, as Chief Creative
Officer of PMA. Since August 2011, Ms. Gottschalk is also serving as Director of Jing Holdings Limited, a holding company that operates
Jax Coco, a leading coconut water brand, and from September 2012 to May 2023 served as Director of Jax Coco UK Limited. Ms. Gottschalk
holds a B.A. from University of Kent. Ms. Gottschalk is the wife of Max Gottschalk, the Chairman of our board of directors. We believe
that Ms. Gottschalk is qualified to serve as a member of our board of directors due to the perspective and experience she brings as our
Chief Creative Officer and her creative, innovative and entrepreneurial attributes that provide valuable insight to our board and are
aligned with our unique culture.
 

55
 

 
Non-Executive
Directors
 
Max
Gottschalk – Chairman of the Board of Directors
 
Mr.
Gottschalk has served as the Chairman of our board of directors since March 2021, a member of PMA’s board of directors since May
2012 and a member of PMUK’s board of directors since July 2017. Since April 2022, Mr. Gottschalk has been serving as Director at
Nurture Brands Limited, a plant based food and beverage business. Since November 2021, Mr. Gottschalk has been serving as Director at
various holding entities for investments of the Hycap Fund, an energy transition private equity fund that invests in the hydrogen ecosystem.
Since August 2011, Mr. Gottschalk has also been serving as Director of Jing Holdings Limited, a holding company that operated Jax Coco,
a leading coconut water brand that was acquired by Nurture Brands Limited in 2022, and from August 2019 to May 2023 served as Director
of Jax Coco UK Limited. Mr. Gottschalk is also the Co-Founder of and since December 2020 has been serving as a Partner and Director at
Ocean 14 Capital Ltd., a private equity fund investing in emerging companies and technology to help protect and sustain our oceans. Since
September 2019, Mr. Gottschalk has been serving as Director at Aeon Investment Limited, a credit-focused investment company, based in
London. Mr. Gottschalk is also the Founder of and since December 2015 has been serving as the Chief Executive Officer and Director at
Vedra Partners Ltd., a multi-family office with operations in London and Switzerland. In addition, Mr. Gottschalk is the Co-Founder of
and from January 2021 to April 2023 served as a Partner and Director at Hydrogen Equity Partners Ltd., an investment management firm
with a focus on new hydrogen energy sources. Mr. Gottschalk also co-founded Gottex Fund Management in 1998, a global asset management
company that he built and brought to market in 2007 on the Swiss stock exchange. Prior to Gottex, he ran Bear Stearns’s fixed income
derivatives hedge fund sales team in New York. Mr. Gottschalk holds a B.A. in Finance from the McIntire School of Commerce at the University
of Virginia. We believe that Mr. Gottschalk is qualified to serve as a member of our board of directors due to his extensive leadership
and business experience as an entrepreneur and investor, as well as his service on other boards of directors.
 
Andre
Keijsers – Director
 
Mr.
Keijsers has served as a member of our board of directors since October 2023. Since May 2016, Mr. Keijsers has been serving as Director
of PMA, and from July 2017 to September 2019, Mr. Keijsers served as Director of PMUK. Since October 2020, Mr. Keijsers has been serving
as the Chief Executive Officer and a Director of Van Lanschot Kempen Investment Management (UK) Ltd, an investment management company
and the regulated UK subsidiary of Dutch-listed Van Lanschot Kempen N.V. From January 2017 to July 2019, Mr. Keijsers was a senior partner
at Vedra Partners Ltd., a multi-family office with operations in London and Switzerland. Prior to that, Mr. Keijsers served as the Chief
Financial Officer of Kings Rock Global Investment Partners Ltd from April to December 2016, and the Chief Financial Officer and Director
of Fansz Ltd., a social media technology company, from April to December 2015. Fansz Ltd. filed for liquidation in January 2016. From
2008 to 2015, Mr. Keijsers was a member of the Executive Committee and the Head of M&A of Gottex Fund Management, a global asset
management company. From 2001 to 2007, Mr. Keijsers served as the Chief Financial Officer of Swapstream, an electronic trading platform
for interest rate swaps and a subsidiary of CME Group Inc. (Nasdaq: CME). Mr. Keijsers is the founder of Arnhem Consulting Limited, through
which he provides financial and corporate governance advice to companies. From February 2017 until October 2023, Arnhem Consulting Limited
provided consulting services to PMA. Since August 2019, Mr. Keijsers has been serving as Director of Pinkhurst Lane Ltd. Since November
2018, Mr. Keijsers has also been serving as Director of TGR1.618 Ltd, Iris Audio Technologies Ltd, Iris Audio Engineering Ltd and Iris
Clarity Ltd. From May 2016 to September 2019, Mr. Keijsers served as Director of Jing Holdings Limited, a holding company that operates
Jax Coco UK Limited, a leading coconut water brand, and from May 2016 to August 2019, he served as Director of Jax Coco UK Limited. Mr.
Keijsers was an Equity Sales Associate at ABN AMRO Bank N.V. from 1991 to 1994 and Associate Director of Equity Sales at UBS from 1994
to 1996. Mr. Keijsers received a doctorandus degree in Computer Science from the Radboud University, Nijmegen, Netherlands. We believe
that Mr. Keijsers is qualified to serve as a member of our board of directors due to his extensive leadership, financial and corporate
governance experience, his understanding of the Company’s operations, as well as his service on other boards of directors.
 
Berndt
Hauptkorn – Director
 
Mr.
Hauptkorn has served as a member of our board of directors since October 2023. Since September 2015, Mr. Hauptkorn has been serving as
President Europe Region of Chanel SAS (Paris), Chanel’s European division, where he oversees all business units (e.g., fashion,
fragrance and beauty, watches and jewelry), employee teams, and sales, service and experience channels across Europe, the Middle East,
India and Africa. Since January 2019, Mr. Hauptkorn has been serving as Global Markets Officer of Chanel Ltd (London), where he is responsible
for the cross-regional coordination of all Region Presidents at Chanel. Since September 2015, Mr. Hauptkorn has been serving as Director
at various Chanel entities: (i) Chairman at Chanel Denmark ApS (Denmark), (ii) Chairman at Chanel Norway AS (Norway), (iii) Chairman
at Chanel Sweden AB (Sweden), (iv) Executive Director at Chanel s.r.o. (Czech Republic), (v) Director at CHANEL s.r.o., organiza&ccaron;ná
zlozka, a branch of Chanel s.r.o. (Slovakia), (vi) Manager at Chanel Moda ve Lüks Tüketim Ürünleri Limited Sirketi
(Turkey) and (vii) Director at Chanel spó&lstrok;ka z ograniczon&aogon; odpowiedzialno&sacute;ci&aogon; (Poland).
Prior to his roles at Chanel, from June 2012 to August 2015, Mr. Hauptkorn served as Chief Executive Officer of Uniqlo Europe and as
Global Officer and Senior Vice President of Uniqlo’s Fast Retailing Group. Since March 2019, Mr. Hauptkorn has been serving as
a Board Member of the European Brands Association (AIM), an organization that represents manufacturers of branded consumer goods in Europe
on key issues, where he represents Chanel interests. Since November 2018, Mr. Hauptkorn has also been serving as a senior advisor to
the founders and directors of LUKSO Blockchain. From August 2007 to December 2009, Mr. Hauptkorn served as Group Chief Executive Officer
of Labelux Group, and from November 2009 to January 2012, Mr. Hauptkorn served as Global Chief Executive Officer of Bally International.
From March 1998 to July 2007, Mr. Hauptkorn held various roles, including Principal, at the Boston Consulting Group (BCG), where he provided
retail, branding, media and private equity consulting services to companies. From August 1994 to August 1997, Mr. Hauptkorn served as
an Account Director at AHEAD Marketing + Kommunikation, a full-service advertising and marketing agency. Mr. Hauptkorn holds a Diplom-Kaufmann
(similar to an MBA) in Business Administration from Friedrich-Alexander-University of Erlangen-Nurnberg and a Dr. rer. pol. (similar
to a PhD) in Business Administration, Law, Economics and Philosophy from Friedrich-Alexander-University of Erlangen-Nurnberg. We believe
that Mr. Hauptkorn is qualified to serve as a member of our board of directors due to his broad and extensive experience in the fashion
industry, his leadership and operational management experience, and his experience on other boards of directors.
 

56
 

 
Tracy
Barwin – Director
 
Ms.
Barwin has served as a member of our board of directors since November 2022. Ms. Barwin has also provided consulting services to the
Company as the acting Ecommerce Director, since November 2022. Since November 2022, Ms. Barwin also serves as Founder and Director of
Tracy B Ltd., a professional services company. From May 2022 until November 2022, Ms. Barwin was not actively engaged in business activities.
Ms. Barwin was Executive Vice President at Hunter Boot Limited from May 2017 until May 2022, overseeing their direct-to-consumer business
which included retail, ecommerce, shop-in-shops and pop-up stores. Prior to becoming Executive Vice President at Hunter Boot Limited,
Ms. Barwin worked at Uniqlo, a large global SPA clothing retailer, where she held the position of Director of Customer Experience, from
September 2010 to April 2017. Ms. Barwin held various roles at Myla, a luxury lingerie company, and Nike, Speedo and Hilton hotels, from
2001 to 2010 across digital, ecommerce and customer experience functions. Ms. Barwin holds a B.A. Honors degree in Modern History and
Politics from Manchester University and later enhanced this degree with a post graduate diploma from The Chartered Institute of Marketing.
We believe that Ms. Barwin is qualified to serve as a member of our board of directors due to the perspective and experience she brings
across the fashion and retail brands she has worked across, specifically her direct-to-consumer experience as well as her experience
on other boards of directors.
 
Tim
Nixdorff – Director
 
Mr.
Nixdorff has served as a member of our board of directors since January 2024. Since January 2024, Mr. Nixdorff has been serving as Chief
Executive Officer and a member of the board of directors of GORE Technologies AG, an investment company. Since August 2023, Mr. Nixdorff
has also been serving as Chief Operating Officer of Neon Equity AG, an investment company. From August 2022 until May 2023, Mr. Nixdorff
served as Chief Marketing Officer of Rag & Bone, a fashion brand. Prior to that, Mr. Nixdorff served as Chief Executive Officer of
Galvan London Ltd., a luxury fashion brand, from May 2020 until July 2022; he also served as a member of the board of directors of Galvan
London Ltd. from June 2020 until August 2022. From January 2018 until April 2020, Mr. Nixdorff served as Managing Director of BEJOND
Germany GmbH, a marketing consulting firm. Mr. Nixdorff holds a Master of Science degree in Economics from Technical University of Dortmund
and a Bachelor of Arts degree in Business Administration from University of Duiburg-Essen. We believe that Mr. Nixdorff is qualified
to serve as a member of our board of directors due to the management and consulting experience he acquired as an officer of companies
in the fashion, marketing and investment industries as well as his experience on other boards of directors.
 
Involvement
in Certain Legal Proceedings
 
To
the best of our knowledge, none of our directors or executive officers have, during the past ten years, been involved in any legal proceedings
described in subparagraph (f) of Item 401 of Regulation S-K.
 
Board
of Directors and Corporate Governance
 
When
considering whether directors have the experience, qualifications, attributes and skills to enable the board of directors to satisfy
its oversight responsibilities effectively considering our business and structure, the board of directors focuses primarily on the information
discussed in each of the directors’ individual biographies as set forth above.
 

57
 

 
The
board of directors periodically reviews relationships that directors have with our company to determine whether the directors are independent.
Directors are considered “independent” as long as they do not accept any consulting, advisory or other compensatory fee (other
than director fees) from us, are not an affiliated person of our company or our subsidiaries (e.g., an officer or a greater than 10%
stockholder) and are independent within the meaning of applicable United States laws and regulations and the NYSE American Company Guide.
In this latter regard, the board of directors uses the NYSE American Company Guide (specifically, NYSE American Company Guide Section
803(a)(2)) as a benchmark for determining which, if any, of our directors are independent, solely in order to comply with applicable
SEC disclosure rules.
 
Board
Committees
 
Our
board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee,
each of which will operate pursuant to its respective charter. The composition of each committee and its respective charter became effective
upon the listing of our common stock on NYSE American, and copies of each charter will be posted on the corporate governance section
of our website at www.perfectmoment.com. Each committee has the composition and responsibilities described below. Our board of
directors may establish other committees from time to time.
 
NYSE
American permits a phase-in period of up to one year for an issuer registering securities in an initial public offering to meet the audit
committee, compensation committee and nominating and corporate governance committee independence requirements. Under the initial public
offering phase-in period, only one member of each committee is required to satisfy the heightened independence requirements at the time
of the listing of our common stock on the NYSE American, a majority of the members of each committee must satisfy the heightened independence
requirements within 90 days following the listing, and all members of each committee must satisfy the heightened independence requirements
within one year from the listing.
 
Audit
Committee
 
Andre
Keijsers, Berndt Hauptkorn and Tracy Barwin serve on the audit committee, which is chaired by Andre Keijsers. Our board of directors
has determined that Andre Keijsers, Berndt Hauptkorn and Tracy Barwin are “independent” for audit committee purposes as that
term is defined in the rules of the SEC and the NYSE American Company Guide, and each member has sufficient knowledge in financial and
auditing matters to serve on the audit committee. Our board of directors has designated Andre Keijsers as an “audit committee financial
expert,” as defined under the applicable rules of the SEC. We intend to comply with the applicable independent requirements for
all members of the audit committee within the time periods specified under such rules.
 
The
audit committee’s responsibilities include:
 


 
●
appointing,
    approving the compensation of, and assessing the independence of our independent registered public accounting firm;

 
 
 

 
●
pre-approving
    auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public
    accounting firm;

 
 
 

 
●
reviewing
    the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing
    our financial statements;

 
 
 

 
●
reviewing
    and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements
    and related disclosures as well as critical accounting policies and practices used by us;

 
 
 

 
●
coordinating
    the oversight and reviewing the adequacy of our internal control over financial reporting;

 

58
 

 


 
●
establishing
    policies and procedures for the receipt and retention of accounting-related complaints and concerns;

 
 
 

 
●
recommending
    based upon the audit committee’s review and discussions with management and our independent registered public accounting firm
    whether our audited financial statements shall be included in our Annual Report on Form 10-K;

 
 
 

 
●
monitoring
    the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial
    statements and accounting matters;

 
 
 

 
●
preparing
    the audit committee report required by SEC rules to be included in our annual proxy statement;

 
 
 

 
●
reviewing
    all related person transactions for potential conflict of interest situations and approving all such transactions; and

 
 
 

 
●
reviewing
    quarterly earnings releases.

 
Compensation
Committee
 
Max
Gottschalk, Andre Keijsers and Tim Nixdorff serve on the compensation committee, which is chaired by Andre Keijsers. Our board of directors
has determined that Andre Keijsers and Tim Nixdorff are “independent” as defined in the NYSE American Company Guide and each
member is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. We intend to comply with
the applicable independent requirements for all members of the compensation committee within the time periods specified under such rules.
 
The
compensation committee’s responsibilities include:
 


 
●
annually
    reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer;

 
 
 

 
●
evaluating
    the performance of our chief executive officer in light of such corporate goals and objectives and determining the compensation of
    our chief executive officer;

 
 
 

 
●
reviewing
    and approving the compensation of our other executive officers;

 
 
 

 
●
reviewing
    and establishing our overall management compensation, philosophy and policy;

 
 
 

 
●
overseeing
    and administering our compensation and similar plans;

 
 
 

 
●
evaluating
    and assessing potential and current compensation advisors in accordance with the independence standards identified in the NYSE American
    Company Guide;

 
 
 

 
●
retaining
    and approving the compensation of any compensation advisors;

 
 
 

 
●
reviewing
    and making recommendations to our board of directors about our policies and procedures for the grant of equity-based awards;

 
 
 

 
●
evaluating
    and making recommendations to the board of directors about director compensation;

 
 
 

 
●
preparing
    the compensation committee report required by SEC rules, if and when required, to be included in our annual proxy statement; and

 
 
 

 
●
reviewing
    and approving the retention or termination of any consulting firm or outside advisor to assist in the evaluation of compensation
    matters.

 

59
 

 
Nominating
and Corporate Governance Committee
 
Max
Gottschalk, Andre Keijsers, Berndt Hauptkorn and Tim Nixdorff will serve on the nominating and corporate governance committee, which
will be chaired by Andre Keijsers. Our board of directors has determined that Andre Keijsers, Berndt Hauptkorn and Tim Nixdorff are “independent”
as defined in the NYSE American Company Guide. We intend to comply with the applicable independent requirements for all members of the
nominating and corporate governance committee within the time periods specified under such rules.
 
The
nominating and corporate governance committee’s responsibilities include:
 


 
●
developing
    and recommending to the board of directors criteria for board and committee membership;

 
 
 

 
●
establishing
    procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;

 
 
 

 
●
reviewing
    the size and composition of the board of directors to ensure that it is composed of members containing the appropriate skills and
    expertise to advise us;

 
 
 

 
●
identifying
    individuals qualified to become members of the board of directors;

 
 
 

 
●
recommending
    to the board of directors the persons to be nominated for election as directors and to each of the board’s committees;

 
 
 

 
●
developing
    and recommending to the board of directors a code of business conduct and ethics and a set of corporate governance guidelines; and

 
 
 

 
●
overseeing
    the evaluation of our board of directors and management.

 
 
Code
of Business Conduct and Ethics
 
We
have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal
executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
We provide a copy of our code of ethics can be found on our website https://investors.perfectmoment.com/corporate-governance.
We intend to disclose future amendments to, or waivers of, our Code, as and to the extent required by SEC regulations, at the same location
on our website identified above or in public filings.
 
Compensation
Committee Interlocks and Insider Participation
 
None
of the members of our compensation committee is currently or has been within the past three years one of our officers or an employee.
None of our executive officers currently serves, or has served during the last year, as a member of the board of directors or compensation
committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation committee.
 
Corporate
Governance Guidelines
 
We
have adopted corporate governance guidelines, that serve as a flexible framework within which our board of directors and its committees
operate. These guidelines cover a number of areas including the size and composition of the board, board membership criteria and director
qualifications, director responsibilities, board agenda, meetings of independent directors, committee responsibilities and assignments,
board member access to management and independent advisors, director communications with third parties, director compensation, and management
succession planning. A copy of our corporate governance guidelines is available on our website at https://www.investors.perfectmoment.com.
 

60
 

 
Conflicts
of Interest
 
We
comply with applicable state law with respect to transactions (including business opportunities) involving potential conflicts. Applicable
state corporate law requires that all transactions involving our company and any director or executive officer (or other entities with
which they are affiliated) are subject to full disclosure and approval of the majority of the disinterested independent members of our
board of directors, approval of the majority of our stockholders or the determination that the contract or transaction is intrinsically
fair to us. More particularly, our policy is to have any related party transactions (i.e., transactions involving a director, an officer
or an affiliate of our company) be approved solely by a majority of the disinterested independent directors serving on the board of directors.
 
Family
Relationships
 
Max
Gottschalk, the Chairman of our board of directors, and Jane Gottschalk, and our Chief Creative Officer and a member of our board of
directors, are husband and wife. There are no other family relationships among any of the directors or executive officers.
 
ITEM
11. EXECUTIVE COMPENSATION
 
Director
Compensation
 
During
the fiscal year ended March 31, 2024, we paid cash and equity-based compensation to our non-employee directors for their service on our
board of directors. We have reimbursed and will continue to reimburse all of our non-employee directors for their reasonable out-of-pocket
expenses incurred in attending board of directors and committee meetings.
 
As
of March 31, 2024, our non-employee directors held 158,400 outstanding option awards to purchase or to be issued our common stock.
 
As
of March 31, 2024, Jane Gottschalk, our current Chief Creative Officer and a member of our board of directors, who was a non-employee
director until August 2022, held options to purchase 68,172 shares of our common stock. We granted options to purchase 30,000 shares
of our common stock each (for a total of 120,000 shares of our common stock) to Andre Keijsers, Tracy Barwin, Berndt Hauptkorn and Tim
Nixdorff, our four independent directors, pursuant to and upon the terms and conditions of their Independent Director Agreements with
us, vesting over a period of three years from the effective date of each such Independent Director Agreement. On March 5, 2024 we granted
an additional 6,000 options to purchase our common stock to Berndt Hauptkorn and Tim Nixdorf, vesting over a period of three years from
the effective date of each such Independent Director Agreement. On March 5, 2024 we granted an additional 13,200 options to purchase
our common stock to Andre Keijsers and Tracy Barwin, vesting over a period of three years from the effective date of each such Independent
Director Agreement.
 
We
have implemented a compensation plan for our non-employee directors, such that non-employee directors will receive an annual cash retainer
and/or an annual grant of stock options. Our committee chairpersons will not receive certain additional retainer fees. Our directors
who are also our employees or officers will not receive any compensation specifically related to their activities as directors, other
than reimbursement for expenses incurred in connection with their attendance at meetings.
 
Compensation
to our board of directors will be reviewed annually, and changes will be recommended by the compensation committee and approved by our
board of directors.
 
Board
compensation will be reviewed annually, and changes will be recommended by the compensation committee and approved by our board of directors.
 

61
 

 
Director
Compensation Table
 
The
following table discloses the cash fees, bonuses and stock awards and total compensation earned, paid or awarded to each of our non-employee
directors during the fiscal year ended March 31, 2024. Columns disclosing compensation under the headings “Non-Equity Incentive
Plan Compensation,” and “Change in Pension Value and Nonqualified Deferred Compensation Earnings” are not included
because no compensation in these categories was awarded to, earned by or paid to our non-employee directors in the fiscal year ended
March 31, 2024. The dollar amounts shown are in U.S. dollars. The amounts originally in British pounds were converted to U.S. dollars
for this table using the average of the average exchange rates for each fiscal month during the applicable fiscal year. Applying this
formula to the fiscal year ended March 31, 2024, £1.00 was equal to $1.2569.
 


Name(1) 
Fees
    Earned or Paid in Cash ($)  
Bonus
                                            ($)  
Option
Awards(2) ($)
                                              
Total
    ($) 

Max Gottschalk 
 180,994  
 100,000  
 175,778  
 456,772(3)

Tracy Barwin 
 141,763  
 -  
 170,454  
 312,217(4)

Andre Keijsers 
 48,554  
 -  
 170,454  
 219,008(5)

Berndt Hauptkorn 
 25,000  
 -  
 142,045  
 167,045(6)

Tim Nixdorff 
 12,500  
 -  
 142,045  
 154,545(7)

 


(1)
Mark
    Buckley, a Director and Chief Executive Officer and Jane Gottschalk a Director and Chief Creative Officer during the fiscal year
    ending March 31, 2024, are not included in this table as they were employees, and, thus, received no compensation for their services
    as a director. The compensation received by Mr. Buckley and Ms. Gottschalk as employees are disclosed in the section entitled “Executive
    Compensation – Summary Compensation Table” appearing elsewhere in this Annual Report.

 
 

(2)
For
    valuation assumptions on stock option awards, refer to Note 13 of our audited consolidated financial statements for the year
    ended March 31, 2024 of this Annual Report. The disclosed amounts reflect the fair value of the stock option awards that were granted
    during the fiscal year ended March 31, 2024 in accordance with FASB ASC Topic 718.

 
 

(3)
The
    amount reported for Mr. Gottschalk represents (i) consulting fees paid to him pursuant to the terms of his consulting agreement (ii)
    reflects incentive bonus paid for successful initial public offering plus listing on NYSE American and (iii) stock options to purchase
    50,000 shares of our common stock.

 
 

(4)
The
    amount reported for Ms. Barwin represents (i) advisory fees paid to her pursuant to the terms of her consulting agreement for providing
    advisory services from April 2023 to October 22, 2023 plus her director fees from October 23, 2023 to March 31, 2024 (ii) stock options
    to purchase 42,300 shares of our common stock.

 
 

(5)
The
    amount reported for Mr. Keijsers represents (i) advisory fees paid to him pursuant to the terms of our consulting agreement with
    Arnhem Consulting Limited for providing advisory services from April 2023 to October 22, 2023 plus his director fees from September
    15, 2023 to March 31, 2024, (ii) stock options to purchase 42,300 shares of our common stock.

 
 

(6)
The
    amount reported for Berndt Hauptkorn represents (ii) his director fees from September 15, 2023 to March 31, 2024, (ii) stock options
    to purchase 36,000 shares of our common stock.

 
 

(7)
The
    amount reported in this column for Tim Nixdorff represents (i) his director fees from January 1, 2024 to March 31, 2024, (ii) stock
    options to purchase 36,000 shares of our common stock.

 

62
 

 
Consulting
Agreements
 
Max
Gottschalk
 
We,
through PMA, are party to a consulting agreement with Max Gottschalk, dated May 15, 2019, which continues until terminated in accordance
with its terms, during which Mr. Gottschalk is entitled to receive fees for services rendered amounting to £8,000 per month from
April 2021 to November 2022 and £12,000 per month since December 2022. These amounts are in lieu of any other cash payments or
equity awards Mr. Gottschalk may otherwise have been entitled to receive as a member of our board of directors.
 
Tracy
Barwin
 
We
were party to a consulting agreement with Tracy Barwin, dated November 18, 2022, pursuant to which Ms. Barwin was entitled to receive
£1,500 per day for services rendered with a minimum commitment of two days per month. These amounts were in lieu of any other cash
payments or equity awards Ms. Barwin may otherwise have been entitled to receive as a member of our board of directors. The consulting
agreement with Ms. Barwin was terminated in October 2023 and replaced by an independent director agreement, described below under “—
Independent Director Compensation.”
 
Arnhem
Consulting Limited (Andre Keijsers)
 
We,
through PMA, were party to a consulting agreement with Arnhem Consulting Limited (“Arnhem”), a company controlled by Andre
Keijsers, dated February 28, 2017, pursuant to which Arnhem was entitled to receive £3,200 per month for services rendered. The
consulting agreement was terminated in October 2023 as a result of Mr. Keijsers becoming a director of the Company.
 
Independent
Director Compensation
 
Andre
Keijsers
 
On
September 15, 2023, we entered into an Independent Director Agreement with Andre Keijsers, pursuant to which Mr. Keijsers will receive
an annual cash fee of $50,000, and an initial grant of stock options to purchase 30,000 shares of our common stock pursuant to the 2021
Plan. On March 5, 2024, we granted Mr. Keijsers an additional 13,200 stock options for services to be rendered. We will pay the annual
cash compensation fee to Mr. Keijsers in monthly installments no later than the 15th of each such calendar month, commencing on October
23, 2023, pro-rated for the initial and last payments, if applicable. The options will vest annually over a four-year period starting
from the agreement date, with such vesting subject to Independent Director Agreement not having been terminated at the time of vesting
and the other terms and conditions of the 2021 Plan or successor plan as well as the applicable stock option agreement between us and
Mr. Keijsers. The options will have an exercise price equal to the Fair Market Value (as defined in the 2021 Plan) as of the date on
which the options will be granted and an exercise period of five years from the date of the Independent Director Agreement. We will also
reimburse Mr. Keijsers for pre-approved reasonable business-related expenses incurred in good faith in connection with the performance
of his duties for us. As also required under the Independent Director Agreement, we have separately entered into standard indemnification
agreements with Mr. Keijers.
 
Berndt
Hauptkorn
 
On
September 15, 2023, we entered into an Independent Director Agreement with Berndt Hauptkorn, pursuant to which Mr. Hauptkorn will receive
an annual cash fee of $50,000, and an initial grant of stock options to purchase 30,000 shares of our common stock pursuant to the 2021
Plan. On March 5, 2024, we granted Mr. Hauptkorn an additional 6,000 stock options for services to be rendered. We will pay the annual
cash compensation fee to Mr. Hauptkorn in monthly installments no later than the 15th of each such calendar month, commencing on October
23, 2023, pro-rated for the initial and last payments, if applicable. The options will vest annually over a four-year period starting
from the agreement date, with such vesting subject to Independent Director Agreement not having been terminated at the time of vesting
and the other terms and conditions of the 2021 Plan or successor plan as well as the applicable stock option agreement between us and
Mr. Hauptkorn. The options will have an exercise price equal to the Fair Market Value (as defined in the 2021 Plan) as of the date on
which the options will be granted and an exercise period of five years from the date of the Independent Director Agreement. We will also
reimburse Mr. Hauptkorn for pre-approved reasonable business-related expenses incurred in good faith in connection with the performance
of his duties for us. As also required under the Independent Director Agreement, we have separately entered into standard indemnification
agreements with Mr. Hauptkorn.
 

63
 

 
Tim
Nixdorff
 
On
January 18, 2024, we entered into an Independent Director Agreement with Tim Nixdorff, pursuant to which Mr. Nixdorff will receive an
annual cash fee of $50,000, and an initial grant of stock options to purchase 30,000 shares of our common stock pursuant to the 2021
Plan. On March 5, 2024, we granted Mr. Nixdorff an additional 6,000 stock options for services to be rendered. We will pay the annual
cash compensation fee to Mr. Nixdorff in monthly installments no later than the 15th of each such calendar month, commencing on October
23, 2023, pro-rated for the initial and last payments, if applicable. The options will vest annually over a four-year period starting
from the agreement date, with such vesting subject to Independent Director Agreement not having been terminated at the time of vesting
and the other terms and conditions of the 2021 Plan or successor plan as well as the applicable stock option agreement between us and
Mr. Nixdorff. The options will have an exercise price equal to the Fair Market Value (as defined in the 2021 Plan) as of the date on
which the options will be granted and an exercise period of five years from the date of the Independent Director Agreement. We will also
reimburse Mr. Nixdorff for pre-approved reasonable business-related expenses incurred in good faith in connection with the performance
of his duties for us. As also required under the Independent Director Agreement, we have separately entered into standard indemnification
agreements with Mr. Nixdorff.
 
Tracy
Barwin
 
On
October 23, 2023, we entered into an Independent Director Agreement with Tracy Barwin, pursuant to which Ms. Barwin will receive an annual
cash fee of $50,000, and an initial grant of stock options to purchase 30,000 shares of our common stock pursuant to the 2021 Plan. On
March 5, 2024, we granted Mr. Keijsers an additional 13,200 stock options for services to be rendered. We will pay the annual cash compensation
fee to Ms. Barwin in monthly installments no later than the 15th of each such calendar month, commencing on October 23, 2023, pro-rated
for the initial and last payments, if applicable. The options will vest annually over a four-year period starting from the agreement
date, with such vesting subject to Independent Director Agreement not having been terminated at the time of vesting and the other terms
and conditions of the 2021 Plan or successor plan as well as the applicable stock option agreement between us and Ms. Barwin. The options
will have an exercise price equal to the Fair Market Value (as defined in the 2021 Plan) as of the date on which the options will be
granted and an exercise period of five years from the date of the Independent Director Agreement. We will also reimburse Ms. Barwin for
pre-approved reasonable business-related expenses incurred in good faith in connection with the performance of her duties for us. As
also required under the Independent Director Agreement, we have separately entered into standard indemnification agreements with Ms.
Barwin.
 
Outstanding
Equity Awards at Fiscal Year-End
 
The
following table sets forth, for each non-employee director, certain information concerning outstanding option awards as of March 31,
2024:
 


Name 
Number
                                            of securities underlying unexercised options (exercisable) (#)  
Number
                                            of securities underlying unexercised options (unexercisable) (#)  
Option exercise price ($)  
Option
                                            expiration date 

Max Gottschalk 
       -  
 50,000  
 4.10  
 March
                                            4, 2029(1)

  
    
    
    
   

Tracy Barwin 
 -  
 43,200  
 4.10  
 March
                                            4, 2034(1)

  
    
    
    
   

Andre Keijsers 
 -  
 43,200  
 4.10  
 March
                                            4, 2034 (1)

  
    
    
    
   

Berndt Hauptkorn 
 -  
 36,000  
 4.10  
 March
                                            4, 2034 (1)

  
    
    
    
   

Tim Nixdorff 
 -  
 36,000  
 4.10  
 March
                                            4, 2034 (1)

 


(1)
    
25%
    vesting on the first, second, third, and fourth anniversaries from director start date.

 

64
 

 
Executive
Compensation
 
Named
Executive Officers
 
Our
named executive officers for the fiscal year ended March 31, 2024 set forth in this annual report (the “Named Executive Officers”)
are Mark Buckley, Jane Gottschalk and Jeff Clayborne.
 
Summary
Compensation Table
 
The
following table summarizes the compensation of our Named Executive Officers during the fiscal year ended March 31, 2024.
 
The
dollar amounts shown are in U.S. dollars. The amounts originally in British pounds were converted to U.S. dollars for this table using
the average of the average exchange rates for each fiscal month during the applicable fiscal year. Applying this formula to the fiscal
year ended March 31, 2024, £1.00 was equal to $1.2569.
 


Name and
    Principal Position 
Fiscal Year  
Salary
                                            ($)  
Bonus ($)  
Stock Awards ($)  
Option Awards ($)  
All
                                            Other Compensation ($)  
Total ($) 

  
   
   
   
   
   
   
  

Mark Buckley 
 2024  
 314,225(1) 
 187,916(2) 
 1,230,000(3) 
 -  
 2086(4) 
 1,734,227 

Chief Executive Officer 
 2023  
 121,511(5) 
 -  
 -  
 -  
 398(4) 
 121,909 

  
    
    
    
    
    
    
   

Jeff Clayborne(1) 
 2024  
 83,344(6) 
 -  
 -  
 1,183,706(7) 
 -  
 1,267,050 

Chief Financial Officer 
    
    
    
    
    
    
   

  
    
    
    
    
    
    
   

Jane Gottschalk 
 2024  
 251,380(1) 
 187,916(2) 
 -  
 1,054,668(8) 
 -  
 1,493,964 

Chief Creative Officer 
 2023  
 140,642(5) 
 -  
 -  
 -  
 48,220(9) 
 224,022 

 


(1)
Reflects
    actual earnings for the fiscal year ended March 31, 2024.

(2)
On
    February 12, 2024, we paid a bonus for the successful initial public offering and listing on NYSE American.

(3)
On
    March 5, we granted Mr. Buckley a restricted stock unit totaling $1,230,000 payable in 300,000 shares of our common stock pursuant
    to the terms of his employment agreement. The restricted stock unit vests equally over four years on the anniversary date of his
    contractual start date. The price per share as reported by NYSE American on the day of issuance was $4.10 and was used to calculate
    fair market value.

(4)
The
    amount reported in this column for Mr. Buckley represents PMUK contributions to the United Kingdom’s National Employment Savings
    Trust.

(5)
Reflects
    actual earnings for the fiscal year ended March 31, 2023, which may differ from approved 2023 base salary due to start date.

(6)
Reflects
    actual earnings for the fiscal year ended March 31, 2024, which may differ from approved 2023 base salary due to start date.

(7)
On
    March 5, 2024, we granted Mr. Clayborne a stock option to purchase up to 300,000 shares of our common stock pursuant to his employment
    agreement at an exercise price of $4.10 per share. The option is not currently vested and will vest equally over four years from
    his contractual start day and will expire on March 4, 2034.

(7)
On
    March 5, 2024, we granted Ms. Gottschalk a stock option to purchase up to 300,000 shares of our common stock at an exercise price
    of $4.10 per share. The option is not currently vested and will vest equally over four years from July 18, 2023, and will expire
    on March 4, 2029.

(9)
The
    amount reported in this column for Ms. Gottschalk represents consulting fees paid to her pursuant to the terms of her consulting
    agreement for the five-month period from April 2022 to August 2022. Effective September 1, 2022, Ms. Gottschalk became an employee
    of PMUK.

 
Employment
Agreements
 
Named
Executive Officers
 
Mark
Buckley
 
On
October 21, 2022, we entered into a Contract of Employment, through PMUK, for Mr. Buckley to serve as our Chief Executive Officer and
our former acting Chief Financial Officer, commencing November 7, 2022. Mr. Buckley served as acting Chief Financial Officer until October
2023. Pursuant to the terms of the agreement, Mr. Buckley is entitled to receive an annual base salary of £250,000 and is eligible
to receive performance-based bonuses, and is entitled to receive, but has not yet been granted, options to purchase 300,000 shares of
our common stock, vesting over a period of 4 years. The options were to be granted at $0.01, which is below fair market value, therefore,
the Company issued Mr. Buckley RSUs under the same terms and conditions of the options. In connection with his employment, Mr. Buckley
also serves as a member of our board of directors.
 

65
 

 
Either
we or Mr. Buckley may terminate for any reason upon 3 months’ prior written notice. We may also, at our sole discretion, terminate
the agreement at any time and with immediate effect by paying Mr. Buckley an amount equal to the base salary he would have been entitled
to receive during the notice period. In addition, we may terminate the agreement without notice if there is (a) serious or persistent
breach of any terms of his employment (b) gross misconduct or any conduct tending to bring himself or us into disrepute or (c) acts of
dishonesty, whether relating to us, an employee, a customer or otherwise.
 
Mr.
Buckley provides that he will be subject to certain non-solicitation provisions relating to customers, suppliers and/or employees of
the Company during his employment and for a 12-month period following the termination of his employment.
 
As
of March 31, 2024, Mr. Buckley held 75,000 shares of our common stock.
 
Jane
Gottschalk
 
On
September 7, 2022, we entered into a Contract of Employment, through PMUK, for Ms. Gottschalk to serve as our Chief Creative Officer
commencing September 1, 2022. Pursuant to the terms, Ms. Gottschalk is entitled to receive an annual base salary of £200,000 and
was eligible to receive a guaranteed bonus of £50,000 payable on the first anniversary of her employment. Ms. Gottschalk has waived
her right to receive such bonus. Future bonuses are dependent upon individual and company performance.
 
Either
we or Ms. Gottschalk may terminate the Contract of Employment for any reason upon 3 months’ prior written notice. We may also,
at our sole discretion, terminate the agreement at any time and with immediate effect by paying Ms. Gottschalk an amount equal to the
base salary she would have been entitled to receive during the notice period. In addition, we may terminate the agreement without notice
if there is (a) serious or persistent breach of any terms of his employment (b) gross misconduct or any conduct tending to bring herself
or us into disrepute or (c) acts of dishonesty, whether relating to us, an employee, a customer or otherwise.
 
Ms.
Gottschalk provides that she will be subject to certain non-solicitation provisions relating to customers, suppliers and/or employees
of the Company during her employment and for a 12-month period following the termination of her employment.
 
As
of March 31, 2024, Ms. Gottschalk held options to purchase 368,172 shares of our common stock.
 
Other
Executive Officers
 
Jeff
Clayborne
 
On
October 20, 2023 (the “Effective Date”), we entered into an Employment Agreement for Mr. Clayborne to serve as our Chief
Financial Officer, commencing as of such date, which was amended on January 22, 2024. Pursuant to the terms, Mr. Clayborne is entitled
to receive an annual base salary of $275,000 and is eligible to receive an annual bonus; provided, however, that the decision to provide
any annual bonus and the amount and terms of any annual bonus will be in the sole and absolute discretion of our board of directors and
the compensation committee.
 
Mr.
Clayborne is also eligible to participate in the 2021 Plan and pursuant to his employment, is entitled to receive, subject to approval
by our board of directors, options to purchase 300,000 shares of our common stock on the Effective Date, vesting annually over four years
in equal installments, with the first vesting on the first anniversary of the Effective Date, with an exercise price equal to the Fair
Market Value (as defined in the 2021 Plan) as of the date on which the options will be granted, which stock options will expire five
years from the Effective Date.
 

66
 

 
The
agreement will continue until the second anniversary thereof, unless terminated earlier; provided that, on such second anniversary of
the Effective Date and each annual anniversary thereafter, the agreement will be automatically extended, upon the same terms and conditions,
for successive one-year periods, unless either party provides written notice of its intention not to extend the term of the agreement
at least 30 days prior to the applicable anniversary date.
 
Either
we or Mr. Clayborne may terminate the agreement for any reason upon 30 days’ advance written notice. If Mr. Clayborne’s employment
is terminated upon either party’s failure to renew the agreement, by us for Cause (as defined in the agreement) or by Mr. Clayborne
without Good Reason (as defined in the agreement), Mr. Clayborne will be entitled to receive (i) any accrued but unpaid base salary and
accrued but unused vacation, (ii) any earned but unpaid annual bonus with respect to any completed calendar year immediately preceding
the termination date (provided that, if Mr. Clayborne’s employment is terminated by us for Cause, then any such accrued but unpaid
annual bonus will be forfeited), (iii) reimbursement for unreimbursed business expenses properly incurred by Mr. Clayborne and (iv) such
employee benefits (including equity compensation), if any, to which Mr. Clayborne may be entitled under our employee benefit plans as
of the termination date (clauses (i) through (iii), the “Accrued Amounts”). If Mr. Clayborne’s employment is terminated
by us without Cause or by Mr. Clayborne for Good Reason, Mr. Clayborne will be entitled to the Accrued Amounts and, subject to the terms
and conditions of the agreement, including Mr. Clayborne’s execution of a release of claims, Mr. Clayborne will be entitled to
receive continued base salary for three months plus a lump sum payment of $13,300. In addition, all stock options granted to Mr. Clayborne
that are scheduled to vest at the end of the annual vesting period in which such termination occurs will immediately vest upon the termination
date; all other, unvested options will be terminated upon such termination date.
 
Mr.
Clayborne’s agreement provides that he will be subject to certain non-competition provisions and non-solicitation provisions relating
to customers and/or employees of the Company during his employment and for a one-year period following the termination of his employment.
The agreement also includes provisions governing Company confidential information and indemnification rights.
 
As
of March 31, 2024, Mr. Clayborne held options to purchase 300,000 shares of our common stock
 
UK
National Employment Savings Trust
 
Our
subsidiary in the United Kingdom, PMUK, is required by the applicable local laws and regulations to make contributions to the United
Kingdom’s National Employment Savings Trust for all eligible personnel, including Mark Buckley, our Chief Executive Officer and
former acting Chief Financial Officer. During the fiscal year ended March 31, 2024 and March 31, 2023, we contributed £1,660 and
£330, respectively to the National Employment Savings Trust for Mr. Buckley.
 
2021
Equity Incentive Plan
 
The
board of directors and stockholders adopted our 2021 Equity Incentive Plan on August 24, 2021. Our 2021 Equity Incentive Plan, as amended
(the “2021 Plan”), provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”), to our employees and our parent and subsidiary corporations’ employees, and
for the grant of non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance units, and performance shares
to our employees, directors, and consultants and our parent and subsidiary corporations’ employees and consultants. As of June
26, 2024, there were 4,299,957 shares of our common stock granted or available for grant under the 2021 Plan of which 1,496,807
are allocated to employees and consultants (vested and non-vested), 208,400 are allocated to Directors (vested and non-vested), and 2,519,750
were unallocated.
 
Authorized
Shares
 
The number of shares of our common stock available
for issuance under the 2021 Plan also includes an annual increase on the first day of each fiscal year beginning with the fiscal year
ending March 31, 2025 and ending on (and including) the fiscal year ending March 31, 2031, in an amount equal to the least of:
 


 
●
    
500,000
    shares of our common stock; or 

 
 
 

 
●
    
such
    number of shares of our common stock as the administrator may determine. 

 

67
 

 
If
an award granted under the 2021 Plan expires or becomes unexercisable without having been exercised in full, is surrendered pursuant
to an exchange program or, with respect to restricted stock, RSUs, performance units, or performance shares, is forfeited to, or repurchased
by, us due to failure to vest, then the unpurchased shares (or for awards other than stock options or stock appreciation rights, the
forfeited or repurchased shares) which were subject thereto will become available for future grant or sale under the 2021 Plan (unless
the 2021 Plan has terminated). With respect to stock appreciation rights, only the net shares actually issued will cease to be available
under the 2021 Plan and all remaining shares under stock appreciation rights will remain available for future grant or sale under the
2021 Plan (unless the 2021 Plan has terminated). Shares that actually have been issued under the 2021 Plan under any award will not be
returned to the 2021 Plan; provided, however, that if shares issued pursuant to awards of restricted stock, RSUs, performance shares,
or performance units are repurchased or forfeited to us due to failure to vest, such shares will become available for future grant under
the 2021 Plan. Shares used to pay the exercise price of an award or to satisfy the tax withholding obligations related to an award will
become available for future grant or sale under the 2021 Plan. To the extent an award is paid out in cash rather than shares, the cash
payment will not result in a reduction in the number of shares available for issuance under the 2021 Plan.
 
Plan
Administration
 
The
board of directors or one or more committees appointed by the board of directors will administer the 2021 Plan. In addition, if we determine
it is desirable to qualify transactions under the 2021 Plan as exempt under Rule 16b-3, such transactions will be structured with the
intent that they satisfy the requirements for exemption under Rule 16b-3. Subject to the provisions of the 2021 Plan, the administrator
has the power to administer the 2021 Plan and make all determinations deemed necessary or advisable for administering the 2021 Plan,
including the power to determine the fair market value of our common stock, select the service providers to whom awards may be granted,
determine the number of shares covered by each award, approve forms of award agreement for use under the 2021 Plan, determine the terms
and conditions of awards (including the exercise price, the time or times when the awards may be exercised, any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation regarding any award or the shares relating thereto), construe
and interpret the terms of the 2021 Plan and awards granted under it, prescribe, amend, and rescind rules and regulations relating to
the 2021 Plan, including creating sub-plans, and modify or amend each award, including the discretionary authority to extend the post-termination
exercisability period of awards (provided that no option or stock appreciation right will be extended past its original maximum term),
temporarily suspend the exercisability of an award if the administrator deems such suspension to be necessary or appropriate for administrative
purposes, and to allow a participant to defer the receipt of payment of cash or the delivery of shares that would otherwise be due to
such participant under an award. The administrator may institute and determine the terms of an exchange program under which (i) outstanding
awards are surrendered or cancelled in exchange for awards of the same type (which may have a higher or lower exercise price or different
terms), awards of a different type and/or cash, (ii) participants would have the opportunity to transfer any outstanding awards to a
financial institution or other person or entity selected by the administrator, and/or (iii) the exercise price of an outstanding award
is increased or reduced. The administrator’s decisions, determinations, and interpretations are final and binding on all participants.
 
Stock
Options
 
Stock
options may be granted under the 2021 Plan in such amounts as the administrator will determine in accordance with the terms of the 2021
Plan. The exercise price of options granted under the 2021 Plan must at least be equal to the fair market value of our common stock on
the date of grant. The term of an option will be stated in the award agreement, and in the case of an incentive stock option, may not
exceed 10 years. With respect to any participant who owns stock representing more than 10% of the voting power of all classes of our
outstanding stock, the term of an incentive stock option granted to such participant must not exceed five years and the exercise price
must equal at least 110% of the fair market value on the date of grant. The administrator will determine the methods of payment of the
exercise price of an option, which may include cash, shares, or other property acceptable to the administrator, as well as other types
of consideration permitted by applicable law. After a participant ceases to provide service as an employee, director, or consultant,
he or she may exercise his or her option for the period of time stated in his or her award agreement. In the absence of a specified time
in an award agreement, if the cessation of service is due to death or disability, the option will remain exercisable for 12 months. In
all other cases, in the absence of a specified time in an award agreement, the option will remain exercisable for three months following
the cessation service. An option may not be exercised later than the expiration of its term. Subject to the provisions of the 2021 Plan,
the administrator determines the other terms of options.
 

68
 

 
Stock
Appreciation Rights
 
Stock
appreciation rights may be granted under the 2021 Plan. Stock appreciation rights allow the recipient to receive the appreciation in
the fair market value of our common stock between the exercise date and the date of grant. Stock appreciation rights will expire upon
the date determined by the administrator and set forth in the award agreement. After a participant ceases to provide service as an employee,
director, or consultant, he or she may exercise his or her stock appreciation right for the period of time stated in his or her award
agreement. In the absence of a specified time in an award agreement, if cessation of service is due to death or disability, the stock
appreciation rights will remain exercisable for 12 months. In all other cases, in the absence of a specified time in an award agreement,
the stock appreciation rights will remain exercisable for three months following the cessation of service. However, in no event may a
stock appreciation right be exercised later than the expiration of its term. Subject to the provisions of the 2021 Plan, the administrator
determines the other terms of stock appreciation rights, including when such rights become exercisable and whether to pay any increased
appreciation in cash, shares of our common stock, or a combination thereof, except that the per share exercise price for the shares to
be issued pursuant to the exercise of a stock appreciation right will be no less than 100% of the fair market value per share on the
date of grant.
 
Restricted
Stock
 
Restricted
stock may be granted under the 2021 Plan. Restricted stock awards are grants of shares of our common stock that vest in accordance with
terms and conditions established by the administrator (if any). The administrator will determine the number of shares of restricted stock
granted to any employee, director, or consultant and, subject to the provisions of the 2021 Plan, will determine any terms and conditions
of such awards. The administrator may impose whatever conditions to vesting it determines to be appropriate (for example, the administrator
may set restrictions based on the achievement of specific performance goals or continued service to us); provided, however, that the
administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. Recipients of restricted
stock awards generally will have voting and dividend rights with respect to such shares upon grant without regard to vesting, unless
the administrator provides otherwise. Shares of restricted stock that do not vest are subject to our right of repurchase or forfeiture.
 
Restricted
Stock Units
 
RSUs
may be granted under the 2021 Plan. RSUs are bookkeeping entries representing an amount equal to the fair market value of one share of
our common stock. Subject to the provisions of the 2021 Plan, the administrator determines the terms and conditions of RSUs, including
the vesting criteria, and the form and timing of payment. The administrator may set vesting criteria based upon the achievement of company-wide,
divisional, business unit, or individual goals (including continued employment or service), applicable federal or state securities laws,
or any other basis determined by the administrator in its discretion. The administrator, in its sole discretion, may pay earned RSUs
in the form of cash, in shares, or in some combination thereof. Notwithstanding the foregoing, the administrator, in its sole discretion,
may reduce or waive any vesting criteria that must be met to receive a payout.
 
Performance
Units and Performance Shares
 
Performance
units and performance shares may be granted under the 2021 Plan. Performance units and performance shares are awards that will result
in a payment to a participant only if performance goals established by the administrator are achieved or the awards otherwise vest. The
administrator will establish performance objectives or other vesting provisions in its discretion, which, depending on the extent to
which they are met, will determine the number and/or the value of performance units and performance shares to be paid out to participants.
The administrator may set performance objectives based upon the achievement of company-wide, divisional, business unit, or individual
goals (including continued employment or service), applicable federal or state securities laws, or any other basis determined by the
administrator in its discretion. After the grant of a performance unit or performance share, the administrator, in its sole discretion,
may reduce or waive any performance objectives or other vesting provisions for such performance units or performance shares. Performance
units will have an initial dollar value established by the administrator on or prior to the date of grant. Performance shares will have
an initial value equal to the fair market value of our common stock on the date of grant. The administrator, in its sole discretion,
may pay earned performance units or performance shares in the form of cash, in shares, or in some combination thereof.
 

69
 

 
Non-Employee
Directors
 
The
2021 Plan provides that all outside (non-employee) directors will be eligible to receive all types of awards (except for incentive stock
options) under the 2021 Plan. In order to provide a maximum limit on the awards that can be made to tour non-employee directors, the
2021 Plan provides that in any given fiscal year, a non-employee director may not be paid, issued, or granted equity awards (including
awards issued under the 2021 Plan) with an aggregate value (the value of which will be based on their grant date fair value determined
in accordance with U.S. generally accepted accounting principles) and any other compensation (including without limitation any cash retainers
or fees) that, in the aggregate, exceed $500,000 (excluding awards or other compensation paid or provided to him or her as a consultant
or employee). The maximum limits do not reflect the intended size of any potential grants or a commitment to make grants to our outside
directors under the 2021 Plan in the future.
 
Non-Transferability
of Awards
 
Unless
the administrator provides otherwise, the 2021 Plan generally does not allow for the transfer of awards and only the recipient of an
award may exercise an award during his or her lifetime. If the administrator makes an award transferable, such award will contain such
additional terms and conditions as the administrator deems appropriate.
 
Certain
Adjustments
 
In
the event of certain changes in our capitalization, to prevent diminution or enlargement of the benefits or potential benefits intended
to be made available under the 2021 Plan, the administrator will adjust the number and class of shares that may be delivered under the
2021 Plan and/or the number, class, and price of shares covered by each outstanding award, and the numerical share limits set forth in
the 2021 Plan.
 
Dissolution
or Liquidation
 
In
the event of our proposed dissolution or liquidation, the administrator will notify participants as soon as practicable prior to the
effective date of such proposed transaction and all awards will terminate immediately prior to the consummation of such proposed transaction.
 
Merger
or Change in Control
 
The
2021 Plan provides that in the event of our merger with or into another corporation or entity or a change in control (as defined in the
2021 Plan), each outstanding award will be treated as the administrator determines, including, without limitation, that (i) awards will
be assumed, or substantially equivalent awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof)
with appropriate adjustments as to the number and kind of shares and prices, (ii) upon written notice to a participant, that the participant’s
awards will terminate upon or immediately prior to the consummation of such merger or change in control, (iii) outstanding awards will
vest and become exercisable, realizable, or payable, or restrictions applicable to an award will lapse, in whole or in part, prior to
or upon consummation of such merger or change in control and, to the extent the administrator determines, terminate upon or immediately
prior to the effectiveness of such merger or change in control, (iv) (A) the termination of an award in exchange for an amount of cash
and/or property, if any, equal to the amount that would have been attained upon the exercise of such award or realization of the participant’s
rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the
transaction the administrator determines in good faith that no amount would have been attained upon the exercise of such award or realization
of the participant’s rights, then such award may be terminated by us without payment), or (B) the replacement of such award with
other rights or property selected by the administrator in its sole discretion, or (v) any combination of the foregoing. The administrator
will not be obligated to treat similarly all awards, all awards a participant holds, all awards of the same type, or all portions of
awards.
 

70
 

 
In
the event that the successor corporation does not assume or substitute for the award (or portions thereof), the participant will fully
vest in and have the right to exercise all of his or her outstanding options and stock appreciations rights (or portions thereof) that
is not assumed or substituted for, all restrictions on restricted stock, RSUs, performance shares, and performance units (or portions
thereof) not assumed or substituted for will lapse, and, with respect to such awards with performance-based vesting (or portions thereof)
not assumed or substituted for, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels and
all other terms and conditions met, in all cases, unless specifically provided otherwise under the applicable award agreement or other
written agreement between the participant and us or any parent or subsidiary. Additionally, in the event an option or stock appreciation
right (or portions thereof) is not assumed or substituted for in the event of a merger or change in control, the administrator will notify
each participant in writing or electronically that the option or stock appreciation right (or its applicable portion), as applicable,
will be exercisable for a period of time determined by the administrator in its sole discretion, and the option or stock appreciation
right (or its applicable portion), as applicable, will terminate upon the expiration of such period.
 
With
respect to awards granted to an outside director, in the event of a change in control, the outside director’s options and stock
appreciation rights, if any, will vest fully and become immediately exercisable, all restrictions on his or her restricted stock and
RSUs will lapse, and, with respect to awards with performance-based vesting, all performance goals or other vesting requirements for
his or her performance shares and units will be deemed achieved at 100% of target levels and all other terms and conditions met, in all
cases, unless specifically provided otherwise under the applicable award agreement or other written agreement between the participant
and us or any parent or subsidiary.
 
The
following table sets forth, for each executive officer, certain information concerning outstanding restricted stock awards as of March
31, 2024:
 


Name 
Number
                                            of securities underlying unvested
                                            restricted stock
                                            awards (#)  
Fair
                                            Value ($)  
Vest
    date 

Mark Buckley 
 225,000  
 4.10  
 November
                                            7, 2026(1)

 


(1)
    
Fully
    vests on the fourth anniversary from contractual start date.

 
The
following table sets forth, for each executive officer, certain information concerning outstanding option awards as of March 31, 2024:
 


Name 
Number
                                            of securities underlying unexercised options (exercisable) (#)  
Number
                                            of securities underlying unexercised options (unexercisable) (#)  
Option exercise price ($)  
Option 
                                                                                 expiration date 

Jane Gottschalk 
 68,172  
 -  
 3.50  
 January
                                            1, 2027(1) 

  
    
    
    
   

Jane Gottschalk 
 -  
 300,000  
 4.10  
 March
                                            4, 2029(2) 

  
    
    
    
   

Jeff Clayborne 
 -  
 300,000  
 4.10  
 March
                                            4, 2034(3) 

 


(1)
    
All
    shares have fully vested.

 
 

(2)
25%
    vest on the first, second, third, and fourth anniversaries from July 18, 2023.

 
 

(3)
    
25%
    vest on the first, second, third, and fourth anniversaries from contractual start date.

 

71
 

 
Clawback
Policy
 

Awards are subject to the Company’s clawback policy, which was adopted on January 19, 2024 pursuant to Section
811 of the NYSE American Company Guide, Section 10D of the Exhchange Act, and Rule 10D-1 promulgated under the Exchange Act (the “Clawback
Policy”). The Clawback Policy requires us to recoup incentive-based compensation from current and former executive officers in the
event of an accounting restatement, subject to certain exceptions set forth in the policy. In addition, our board of directors, acting
as the administrator of the Clawback Policy (such administrator to be the Compensation Committee if so designated by the board of directors)
also may specify in an award agreement that the participant’s rights, payments, and benefits with respect to an award will be subject
to reduction, cancellation, forfeiture, recoupment, reimbursement, or reacquisition upon the occurrence of certain specified events. The
administrator of the Clawback Policy may require a participant to forfeit, return, or reimburse us all or a portion of the award and any
amounts paid under the award pursuant to the terms of the Clawback Policy or applicable laws.
 
Amendment;
Termination
 
The
administrator has the authority to amend, alter, suspend, or terminate the 2021 Plan provided such action does not materially impair
the existing rights of any participant. The 2021 Plan will automatically terminate in 2031, unless terminated sooner.
 
Enterprise
Management Incentive Sub-Plan
 
The
2021 Plan includes an Enterprise Management Incentive Sub-Plan for the purpose of granting options to participants residing in the United
Kingdom in compliance with the laws of the United Kingdom.
 
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


 
Equity
Compensation Plan Information
 
The
board of directors and stockholders adopted our 2021 Equity Incentive Plan on August 24, 2021. The 2021 Plan provides for the grant of
incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, to our employees and our
parent and subsidiary corporations’ employees, and for the grant of non-statutory stock options, stock appreciation rights, restricted
stock, RSUs, performance units, and performance shares to our employees, directors, and consultants and our parent and subsidiary corporations’
employees and consultants. As of June 26, 2024, there were 4,299,957 shares of our common stock granted or available for grant under
the 2021 Plan.
 
The
following information is as of March 31, 2024.



 


Plan category 
Number of securities to be issued upon exercise of
    outstanding options, warrants, and rights  
Weighted-average exercise price of outstanding options,
    warrants, and rights  
Number of securities remaining available for future
    issuance under equity compensation plans (excluding securities reflected in third column) 

Equity compensation plans approved by securityholders 
 1,197,012  
$3.94  
 2,527,944 

Equity compensation plans not approved by securityholders 
 136,344  
$0.01  
 - 

Total 
 1,333,356  
$3.54  
 2,527,944 

 

Security Ownership of Certain Beneficial Owners


 
The
following table sets forth certain information regarding the beneficial ownership of our common stock as of June 26, 2024 for
each person, or group of affiliated persons, known to us to beneficially own more than 5% of the common stock. The common stock is
our only class of voting securities which is currently outstanding.

 
Beneficial
ownership of our common stock is determined under the rules of the SEC and generally includes any shares over which a person exercises
sole or shared voting or investment power, or of which a person has a right to acquire ownership at any time within 60 days of the date
of this Annual Report. Except as indicated by footnote, and subject to applicable community property laws, we believe the persons identified
in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.
 
In
the following table, percentage ownership is based on 15,653,449 shares of our common stock outstanding as of June 26, 2024, In computing
the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed to be outstanding
all shares of common stock subject to options or other convertible securities held by that person or entity that are currently exercisable
or releasable or that will become exercisable or releasable within 60 days of June 26, 2024. We did not deem these shares outstanding,
however, for the purpose of computing the percentage ownership of any other person.
 



Title of Class 
Name and address of Beneficial Owner 
Amount and Nature of Beneficial
    Ownership  
Percentage of Class 

Common stock 
Mark Tompkins(1) 
 1,040,000  
 6.2%

 


(1)
The
  address of Mr. Tompkins is App 1, Via Guidino 23, 6900 Lugano-Paradiso, Switzerland.

 

72
 

 

Security
Ownership of Management
 

The
following table sets forth certain information regarding the beneficial ownership of our common stock as of June 26, 2024 for each of
our directors, named executive officers, and all of our directors and executive officers as a group.

 
Unless
otherwise indicated, the address of each of the following persons is 307 Canalot Studios, 222 Kensal Rd, London W10 5BN, United Kingdom,
and each such person has sole voting and investment power with respect to the shares set forth opposite his, her or its name.
 


Title of Class 
Name and address of Beneficial Owner 
Amount and Nature of Beneficial
    Ownership  
Percentage of Class 

  
  
   
  

Common stock 
Named Executive Officers and Directors: 
    
   

  
Max Gottschalk(2) 
 3,898,488  
 24.7%

  
Mark Buckley(3) 
 92,000  
 * 

  
Jeff Clayborne(4) 
 416  
 * 

  
Jane Gottschalk(5) 
 3,898,488  
 24.7%

  
Andre Keijsers(6) 
 14,645  
 * 

  
Berndt Hauptkorn(7) 
 1,600  
 * 

  
Tracy Barwin(8) 
 83  
 * 

  
Tim Nixdorff(9) 
 1,600  
 * 

  
All directors and executive officers as a group (8 persons) 
 4,008,832  
 25.4%

 


 
*
Less
    than 1%.

 


(2)
Consists
    of (i) 3,479,491 shares of common stock held of record by Fermain; (ii) 242,625 shares of common stock held of record by JGA; (iii)
    16,600 shares of common stock issuable held directly; (iv) 16,600 shares of common stock held by Mr. Gottschalks spouse, Jane Gottschalk;
    (v) 143,172 shares of common stock issuable upon the exercise of stock options by Mr. Gottschalk’s spouse, Jane Gottschalk;
    (vi) The total excludes 50,000 shares of our common stock underlying stock options not exercisable within 60 days of June 26, 2024;
    and (vii) The total excludes 225,000 shares of our common stock underlying stock options not exercisable within 60 days of June 26,
    2024 held by Mr. Gottschalks spouse, Jane Gottschalk.

 
 

(3)
Consists
    of 92,000 shares of common stock held directly. The total excludes 225,000 restricted stock units that will not vest within 60 days
    of June 26, 2024.

 
 

(4)
Consists
    of 418 shares of common stock held directly. The total excludes 300,000 shares of our common stock underlying stock options not exercisable
    within 60 days of June 26, 2024.

 
 

(5)
Consists
    of (i) 3,479,491 shares of common stock held of record by Fermain; (ii) 242,625 shares of common stock held of record by JGA; (iii)
    16,600 shares of common stock issuable held directly; (iv) 68,172 shares of common stock issuable upon the exercise of stock options;
    (v) 75,000 shares of common stock issuable upon the exercise of stock options that will vest within 60 days of June 26, 2024; (vi)
    16,600 shares of common stock held by Ms. Gottschalks spouse, Max Gottschalk; (vii) The total excludes 225,000 shares of our common
    stock underlying stock options not exercisable within 60 days of June 26, 2024; and (viii) The total excludes 50,000 shares of our
    common stock underlying stock options not exercisable within 60 days of June 26, 2024 held by Ms. Gottschalks spouse, Max Gottschalk.

 
 

(6)
Consists
    of 14,645 shares of common stock held directly. The total excludes 43,200 shares of our common stock underlying stock options not
    exercisable within 60 days of June 26, 2024.

 
 

(7)
Consists
    of 1,600 shares of common stock held directly. The total excludes 36,000 shares of our common stock underlying stock options not
    exercisable within 60 days of June 26, 2024.

 
 

(8)
Consists
    of 83 shares of common stock held directly. The total excludes 43,200 shares of our common stock underlying stock options not exercisable
    within 60 days of June 26, 2024.

 
 

(9)
Consists
    of 1,600 shares of common stock held directly. The total excludes 36,000 shares of our common stock underlying stock options not
    exercisable within 60 days of June 26, 2024.

 

73
 

 
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 
Transactions
with Related Persons
 
We
follow ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. When
and if we contemplate entering into a transaction in which any executive officer, director, nominee, or any family member of the foregoing
would have a direct or indirect interest, regardless of the amount involved, the terms of such transaction are to be presented to our
full board of directors (other than any interested director) for approval, and documented in the board minutes.
 
SEC
regulations define the related person transactions that require disclosure to include any transaction, arrangement or relationship in
which the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end
for the last two completed fiscal years ($68,130) in which we were or are to be a participant and in which a related person had or will
have a direct or indirect material interest. A related person is: (i) an executive officer, director or director nominee of the company,
(ii) a beneficial owner of more than 5% of our common stock, (iii) an immediate family member of an executive officer, director or director
nominee or beneficial owner of more than 5% of our common stock, or (iv) any entity that is owned or controlled by any of the foregoing
persons or in which any of the foregoing persons has a substantial ownership interest or control.
 
In
addition to the executive officer and director compensation arrangements discussed in “Executive Compensation,” the following
is a description of all related person transactions that occurred during the fiscal year ended March 31, 2024.
 
Consulting
Agreements with Directors
 
Certain
directors of the Company and its subsidiaries provided consulting and advisory services to the Company, as non-employees, recognized
in selling, general and administrative expenses in our consolidated financial statements contained elsewhere in this Annual Report. As
of March 31, 2024, none of these expenses were unpaid. As of March 31, 2023, $22 of such expenses was unpaid and included in accrued
expenses in our consolidated financial statements contained elsewhere in this Annual Report.
 
Below
are the directors of the Company and its subsidiaries, that provided consulting and advisory services during the year.
 


  
Years
    ended March 31, 

  
2024  
2023 

  
   
  

(Amounts in thousands) 
    
   

Max Gottschalk 
$181  
$135 

Jane Gottschalk 
 -  
 48 

Tracy Barwin 
 121  
 89 

Andreas
    Keijsers 
 22  
 48 

Total 
$324  
$320 

 

74
 

 
Max
Gottschalk
 
We,
through PMA, are party to a consulting agreement with Max Gottschalk, dated May 15, 2019, which continues until terminated in accordance
with its terms, during which Mr. Gottschalk is entitled to receive fees for services rendered amounting to £8,000 per month from
April 2021 to November 2022 and £12,000 per month since December 2022. These amounts are in lieu of any other cash payments Mr.
Gottschalk may otherwise have been entitled to receive as a member of our board of directors.
 
Tracy
Barwin
 
We
were party to a consulting agreement with Tracy Barwin, dated November 18, 2022, pursuant to which Ms. Barwin was entitled to receive
£1,500 per day for services rendered with a minimum commitment of two days per month. These amounts were in lieu of any other cash
payments or equity awards Ms. Barwin may otherwise have been entitled to receive as a member of our board of directors. The consulting
agreement with Ms. Barwin was terminated in October 2023 and replaced by an independent director agreement.
 
Arnhem
Consulting Limited (Andre Keijsers)
 
We,
through PMA, were party to a consulting agreement with Arnhem Consulting Limited (“Arnhem”), a company controlled by Andre
Keijsers, dated February 28, 2017, pursuant to which Arnhem was entitled to receive £1,200 per month for services rendered. The
consulting agreement with Mr. Keijsers was terminated in September 2023 and replaced by an independent director agreement.
 
Review,
Approval or Ratification of Transactions with Related Parties
 
Our
board of directors reviews and approves transactions with directors, officers and holders of five percent or more of our voting securities
and their affiliates, each a related party. The material facts as to the related party’s relationship or interest in the transaction
are disclosed to our board of directors prior to their consideration of such transaction, and the transaction is not considered approved
by our board of directors unless a majority of the directors who are not interested in the transaction approve the transaction. Further,
when stockholders are entitled to vote on a transaction with a related party, the material facts of the related party’s relationship
or interest in the transaction are disclosed to the stockholders, who must approve the transaction in good faith.
 
We
have adopted a written related party transactions policy that such transactions must be approved by our audit committee or another independent
body of our board of directors.
 
Director
Independence
 
As
our common stock is currently listed for trading on the NYSE American, we have evaluated independence in accordance with the rules of
the NYSE American Company Guide and the SEC with respect to each director and director nominee. Our board of directors undertook a review
of the independence of its members and considered whether any director has a material relationship with us that could compromise his
or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon the information requested from
and provided by each director concerning their background, employment, and affiliations, including family relationships, our Board has
determined that each of the following non-employee directors are independent as that term is defined under the rules of the NYSE American
Company Guide.
 
In
making these determinations, our board of directors considered the current and prior relationships that each non-employee director has
with us and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the
beneficial ownership of capital stock by each non-employee director, and the transactions involving their affiliates described in this
Annual Report.
 
All
of the members of the Audit, Nomination, and Compensation Committees are also independent.
 
Based
on these standards, our board of directors determined Mark Buckley, Jeff Clayborne, Jane Gottschalk, and Max Gottschalk were not independent.
 

75
 

 
ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
Audit
Fees
 
The
following table shows the fees that we paid for audit and other services provided by Weinberg & Company, P.A. and CohnReznick LLP,
our independent registered public accounting firms for fiscal years ended 2024 and 2023, respectively.
 


Fees 
2024  
2023 

Audit Fees 
$266  
$80 

Audit Related Fees 
 37  
 - 

Other Fees related to initial public offering 
 177  
 21 

Total
    Fees 
$480  
$101 

 
Audit
Fees —This category includes the audit of our annual financial statements and services that are normally provided by the independent
auditors in connection with engagements for those fiscal years.
 
Audit-Related
Fees — This category consists of assurance and related services by the independent auditor that are reasonably related to the performance
of the audit or review of our financial statements and are not reported above under “Audit Fees”.
 
All
Other Fees — This category consists of fees for other miscellaneous items.
 
Pre-Approval
Policies and Procedures
 
The
Audit Committee has adopted policies and procedures to oversee the external audit process and pre-approves all services provided by our
independent registered public accounting firm. All of the above services and fees were reviewed and approved by our board of directors
or Audit Committee, as applicable, before the respective services were rendered.
 
PART
IV
 
ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
(a)(1)
Financial Statements
 
Reference
is made to the financial statements attached beginning on page F-1 of this Annual Report.
 
(a)(2)
Financial Statement Schedules
 
None.
 
(a)(3)
Exhibits
 
Reference
is made to the exhibits listed on the Index to Exhibits.
 
ITEM
16. FORM 10-K SUMMARY
 
None.
 

76
 

 
Index
to Financial Statements
 



Report
    of Independent Registered Public Accounting Firm (PCAOB Firm ID: 572)
F-2

 
 

Consolidated
    Financial Statements:
 

 
 

Balance
    Sheets as of March 31, 2024 and March 31, 2023
F-3

 
 

Statements
    of Operations for the years ended March 31, 2024 and 2023
F-4

 
 

Statements
    of Changes in Stockholders’ Equity (Deficit) for the years ended March 31, 2024 and 2023
F-5

 
 

Statements
    of Cash Flows for the years ended March 31, 2024 and 2023
F-6

 
 

Notes
    to Consolidated Financial Statements for the years ended March 31, 2024 and 2023
F-7

 


 F-1 
 

 
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To
the Board of Directors and Shareholders
Perfect
Moment Ltd and Subsidiaries
 
Opinion
on the Financial Statements
 
We
have audited the accompanying consolidated balance sheets of Perfect Moment Ltd and Subsidiaries (the “Company”) as of March
31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit),
and cash flows for the years then ended and the related notes (collectively referred to as the “financial statements”). In
our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the
Company as of March 31, 2024 and 2023, and the results of its consolidated operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of America.


 
Going
Concern
 
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 2, the Company incurred recurring losses, had a net loss and used cash in operations during the year ended March 31, 2024, and
the Company had an accumulated deficit at March 31, 2024. These matters raise substantial doubt about the Company’s ability to continue
as a going concern. Management’s plans in regard to these matters are also described in Note 2 to the consolidated financial statements.
These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 
Basis
for Opinion
 
These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Accounting
Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
 
Our
audits included performing procedures to assess the risks of material misstatement, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.
 
We
have served as the Company’s auditor since 2023.
 
/s/
Weinberg & Company, P.A.
Weinberg
& Company, P.A.
Los
Angeles, California
July
1, 2024
 

 F-2 
 

 
PERFECT
MOMENT LTD. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(Amounts
in thousands, except share per share data)
 


  
March
    31, 2024  
March
    31, 2023 

  
   
  

ASSETS 
    
   

  
    
   

Current assets: 
    
   

Cash and cash
    equivalents 
$7,910  
$4,712 

Accounts receivable, net 
 1,035  
 997 

Inventories, net 
 2,230  
 2,262 

Prepaid
    and other current assets 
 742  
 708 

Total current assets 
$11,917  
$8,679 

  
    
   

Operating lease right-of-use
    assets 
 143  
 297 

Property and equipment,
    net 
 502  
 833 

Other
    non-current assets 
 47  
 12 

  
    
   

Total
    assets 
$12,609  
$9,821 

  
    
   

LIABILITIES AND STOCKHOLDERS’
    EQUITY (DEFICIT) 
    
   

  
    
   

Current liabilities: 
    
   

Trade payables 
$1,584  
$1,289 

Accrued expenses 
 2,697  
 1,390 

Trade finance facility 
 -  
 26 

Convertible debt obligations 
 -  
 10,770 

Operating lease liability,
    current 
 101  
 299 

Unearned
    revenue 
 420  
 180 

  
    
   

Total current liabilities 
$4,802  
$13,954 

  
    
   

Long Term liabilities: 
    
   

Operating
    lease liability, non-current 
 44  
 8 

Total liabilities 
$4,846  
$13,962 

  
    
   

Commitments and contingencies 
 -   
 -  

  
    
   

Stockholders’ equity (deficit) 
    
   

Common stock, $0.0001
par value, 100,000,000
shares authorized:  15,653,449
and 4,824,352
shares issued and outstanding as of March 31, 2024 and March
    31, 2023, respectively 
$1  
$- 

Series A and Series B convertible
    preferred stock; $0.0001 par value; 10,000,000 share authorized: 0 and 6,513,780 shares issued and outstanding as of March 31, 2024
    and March 31, 2023, respectively 
 -  
 1 

Additional paid-in-capital 
 56,824  
 35,910 

Accumulated other comprehensive
    (loss)/income 
 (85) 
 203 

Accumulated
    deficit 
 (48,977) 
 (40,255)

  
    
   

Total
    stockholders’ equity (deficit) 
$7,763  
$(4,141)

  
    
   

Total
    liabilities and stockholders’ equity (deficit) 
$12,609  
$9,821 

 
The
accompanying notes are an integral part of these consolidated financial statements
 

 F-3 
 

 
PERFECT
MOMENT LTD AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)
(Amounts
in thousands, except share and per share data)
 


  
Year
                                            Ended March
                                            31, 2024  
Year
                                            Ended March
                                            31, 2023 

  
   
  

Revenue, net 
    
   

Wholesale 
$14,060  
$14,888 

Ecommerce 
 10,383  
 8,550 

Total
    Revenue, net 
 24,443  
 23,438 

  
    
   

Cost
    of goods sold 
 15,212  
 14,682 

Gross
    profit 
 9,231  
 8,756 

  
    
   

Operating expenses: 
    
   

Selling, general and administrative
    expenses 
 12,122  
 12,369 

Marketing
    and advertising expenses 
 4,784  
 5,012 

Total
    operating expenses 
 16,906  
 17,381 

  
    
   

Loss
    from operations 
 (7,675) 
 (8,625)

  
    
   

Other income (expense),
    net 
    
   

Interest expense 
 (1,311)  
 (1,840) 

Foreign
    currency transactions gains 
 264 
 39

Total other income (expense),
    net 
 (1,047)  
 (1,801)

  
    
   

Loss before income tax provision 
 (8,722) 
 (10,426)

  
    
   

Income tax provision 
 -  
 121

  
    
   

Net Loss 
 (8,722) 
 (10,305)

  
    
   

Other comprehensive (losses) gains 
    
   

Foreign
    currency translation (loss) gains 
 (288) 
 303 

  
    
   

Comprehensive
    loss 
$(9,010) 
$(10,002)

  
    
   

Basic
    and diluted loss per share 
$(1.34) 
$(2.16) 

Basic
    and Diluted weighted-average number of shares outstanding 
 6,518,960  
 4,767,777 

 
The
accompanying notes are an integral part of these consolidated financial statements
 

 F-4 
 

 
PERFECT
MOMENT LTD AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
For
the Years Ended March 31, 2024 and 2023


(Amounts in thousands,
except share data)

 


  
Shares  
Amount  
Shares  
Amount  
Shares  
Amount  
Capital  
Income (Loss)  
Deficit
  
Deficit 

  
Preference
    Shares  
   
  
Accumulated

  
   
 

  
Series
    A Convertible  
Series
    B Convertible  
Common
    Shares  

Additional
Paid-in  

Other
Comprehensive  
Accumulated  

Total
Stockholders’ 

  
Shares  
Amount  
Shares  
Amount  
Shares 
Amount  
Capital  
Income
    (Loss)  
Deficit  
Deficit 

Balance -March 31, 2022 
 5,323,782 
$         1  
 - 
$           -  
 3,749,352 
$         -  
$26,674  
$(100) 
$(29,950) 
$         (3,375)

Stock compensation expense for employee vested
    options 
 -  
 -  
 -  
 -  
 - 
 -  
 241  
 -  
 -  
 241 

Issuance of common stock to consultants 
 -  
 -  
 -  
 -  
 1,075,000  
 -  
 3,795  
 -  
 -  
 3,795 

Issuance of preference shares for cash 
 -  
 -  
 1,189,998  
 -  
 -  
 -  
 5,200  
 -  
 -  
 5,200 

Foreign currency translation adjustment 
 -  
 -  
 -  
 -  
 -  
 -  
 -  
 303  
 -  
 303 

Net loss 
 -  
 -  
 -  
 -  
 -  
 -  
 -  
 -  
 (10,305) 
 (10,305)

Balance - March 31,
    2023 
 5,323,782  
$1  
 1,189,998  
$-  
 4,824,352  
$-  
$35,910  
$203  
$(40,255) 
$(4,141)

Balance  
 5,323,782  
$1  
 1,189,998  
$-  
 4,824,352  
$-  
$35,910  
$203  
$(40,255) 
$(4,141)

Stock compensation expense for employee vested
    RSUs and options 
 -  
 -  
 -  
 -  
 75,000  
 -  
 739  
 -  
 -  
 739 

Issuance of common stock for cash 
 -  
 -  
 -  
 -  
 409,050  
 -  
 2,179  
 -  
 -  
 2,179 

Sale of common stock from public offering 
 -  
 -  
 -  
 -  
 1,334,000  
 -  
 6,009  
 -  
 -  
 6,009 

Issuance of common stock upon conversion
    of convertible debt and accrued interest 
 -  
 -  
 -  
 -  
 2,497,267  
 -  
 11,987  
 -  
 -  
 11,987 

Issuance of common stock upon conversion
    of series A convertible stock 
 (5,323,782) 
 (1) 
 -  
 -  
 5,323,782  
 1  
 -  
 -  
 -  
 - 

Issuance of common stock upon conversion
    of series B convertible stock 
 -  
 -  
 (1,189,998) 
 -  
 1,189,998  
 -  
 -  
 -  
 -  
 - 

Foreign currency translation adjustment 
 -  
 -  
 -  
 -  
 -  
 -  
 -  
 (288) 
 -  
 (288)

Net loss 
 -  
 -  
 -  
 -  
 -  
 -  
 -  
 -  
 (8,722) 
 (8,722)

Net income
    (loss) 
 -  
 -  
 -  
 -  
 -  
 -  
 -  
 -  
 (8,722) 
 (8,722)

Balance – March
    31, 2024 
 -  
$-  
 -  
$-  
 15,653,449  
$1  
$56,824  
$(85) 
$(48,977) 
$7,763 

Balance 
 -  
$-  
 -  
$-  
 15,653,449  
$1  
$56,824  
$(85) 
$(48,977) 
$7,763 

 
The
accompanying notes are an integral part of these consolidated financial statements
 

 F-5 
 

 
PERFECT
MOMENT LTD. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Amounts
in thousands)
 



  
March
    31, 2024  
March
    31, 2023 

  
For
    the Year Ended 

  
March
    31, 2024  
March
    31, 2023 

  
   
  

Operating Activities: 
    
   

Net loss 
$(8,722) 
$(10,305)

Adjustments to reconcile
    net loss to net cash used in operating activities: 
    
   

Depreciation and amortization 
 555  
 547 

Bad debt expense 
 217  
 80 

Inventory reserve 
 382  
 374 

Unrealized foreign exchange
    (gain) loss 
 (128) 
 334 

Stock based compensation
    – employees 
 739  
 241 

Stock based compensation
    – legal and consulting services 
 -  
 3,795 

Stock based compensation 
 -  
 3,795 

Amortization of stock-based marketing services 
 185  
 1,483 

Amortization of convertible
    debt finance costs 
 492  
 941 

Accrued interest 
 725  
 760 

Effect of changes in assets
    and liabilities: 
    
   

Accounts receivable 
 (238) 
 (519)

Inventories 
 (349) 
 (812)

Prepaid and other current
    assets 
 (219) 
 321 

Operating lease right of
    use asset 
 268 
 184 

Other non-current assets 
 (37) 
 - 

Operating lease right-of-use
    liability 
 (162) 
 (174)

Trade payables 
 295  
 (759)

Accrued expenses 
 1,304  
 514 

Unearned
    revenue 
 240  
 (515)

Net cash used in operating activities 
 (4,453) 
 (3,510)

  
    
   

Investing Activities: 
    
   

Purchases
    of property and equipment 
 (211) 
 (249)

Net cash used by investing activities 
 (211) 
 (249)

  
    
   

Financing Activities: 
    
   

Proceeds from initial public
    offering 
 6,009  
 - 

Proceeds from sale of common
    stock 
 2,179  
 - 

Proceeds from issuance
    of preference shares, net 
 -  
 5,200 

Proceeds from convertible
    debt obligations, net 
 -  
 2,555 

Repayment of shareholder
    loans 
 -  
 (565)

Proceeds from trade
    finance facility 
 1,847  
 4,132 

Repayment of trade finance
    facility 
 (1,873) 
 (4,371)

Repayment
    of other borrowings, net 
 -  
 (21)

Net cash provided by financing activities 
 8,162  
 6,930 

  
    
   

Effect of Exchange Rate
    Changes on Cash 
 (300) 
 (34)

  
    
   

Net change in cash 
 3,198  
 3,137 

  
    
   

Cash - beginning of period 
 4,712  
 1,575 

  
    
   

Cash - end of period 
$7,910  
$4,712 

  
    
   

Supplemental disclosures
    of cash flow information: 
    
   

Interest paid on borrowings
    and bank loans 
$107  
$139

Corporation tax received 
$-  
$121

  
    
   

Supplemental disclosure
    of non-cash investing and financing activities: 
    
   

Conversion of convertible
    debt and accrued interest to common stock 
$11,987  
$- 

Recognition of operating
    lease right of use assets and lease obligations 
$198  
$404 

Write-off of expired operating lease right-of-use assets and lease obligations 
 53  
 - 

Offset of deferred offering
    costs to proceeds received 
$1,169  
$- 

 
The
accompanying notes are an integral part of these consolidated financial statements

 

 F-6 
 

 
PERFECT
MOMENT LTD AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED MARCH 31, 2024 AND 2023
 
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
 
Nature
of operations
 
Perfect
Moment Ltd., a Delaware corporation (“Perfect Moment” or “PML” and, together with its subsidiaries unless the
context otherwise requires, the “Company”), is an owner and operator of a luxury fashion brand that offers ski, surf, and
activewear collections under the brand name Perfect Moment. The Company’s collections are sold directly to customers through ecommerce,
sales to wholesale accounts and through other sales partnerships.
 
Basis
of presentation
 
These
consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”)
and present the consolidated financial position, income (loss), comprehensive income (loss), and cash flows of the Company and its wholly
owned subsidiaries. The figures in the notes to the financials are presented in thousands, therefore the 000’s are removed.
 
Principles
of consolidation
 
These
consolidated financial statements include the accounts of Perfect Moment Ltd. and its wholly owned subsidiaries; Perfect Moment Asia
Limited (“PMA”), Perfect Moment (UK) Limited (“PMUK”), Perfect Moment USA, Inc., (“PMUSA”) and Perfect
Moment TM Sarl. All intercompany balances and transactions have been eliminated.
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Going
concern
 
The
accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities and commitments in the ordinary course of business.
 
Through
March 31, 2024, the Company has funded its operations with proceeds from the sale of common stock from the initial public offering
and the issuance of common stock, alongside existing trade, invoice and shareholder financing arrangements. The Company has
incurred recurring losses, including a net loss of $8,722 for
the year ended March 31, 2024 and used cash in operations of $4,453 during
that period. As of March 31, 2024, the Company
had an accumulated deficit of $48,977.
 

 F-7 
 

 
These
factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying Consolidated Financial
Statements do not include any adjustments as a result of this uncertainty. Management’s plans to alleviate the conditions that
raise substantial doubt include:
 


 
●
Taking
    out short-term loans and debt factoring to assist with working capital shortfalls

 
 
 

 
●
Exploring
    sources of long-term funding in the private markets and additional equity financing

 
 
 

 
●
Closely
    monitoring the collection of debts

 
 
 

 
●
Strategies
    and plans in place to deliver improved margins in the next financial year

 
The
Company’s ability to continue as a going concern for 12 months from the date these Consolidated Financial Statements were available
to be issued is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations, which it has not
been able to accomplish to date, and to obtain additional capital financing. No assurance can be given that the Company will be successful
in these efforts mentioned above. 
 
During
the year ended March 31, 2024, the Company generated net proceeds totaling $8,188
from the sale of our common stock and converted all outstanding convertible debt obligations to equity as part of our initial
public offering (“IPO”).
 
Use
of Estimates
 
The
preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments
in applying the Company’s accounting policies that affect the reported amounts and disclosures made in the consolidated financial
statements and accompanying notes. Management continually evaluates the estimates and judgments it uses. These estimates and judgments
have been applied in a manner consistent with prior periods and there are no known trends, commitments, events or uncertainties that
management believe will materially affect the methodology or assumptions utilized in making these estimates and judgments in these financial
statements. Significant estimates inherent in the preparation of the consolidated financial statements include reserves for uncollectible
accounts receivables, realizability of inventory; customer returns; useful lives and impairments of long-lived tangible and intangible
assets; realization of deferred tax assets and related uncertain tax positions; and the valuation of stock-based compensation
awards. Actual results may differ from these judgements and estimates under different assumptions or conditions and any such differences
may be material.
 
Revenue
Recognition
 
The
majority of the Company’s revenue is recognized at a point in time based on the transfer of control. In addition, the majority
of the Company’s contracts do not contain variable consideration and contract modifications are minimal. The majority of the Company’s
revenue arrangements generally consist of a single performance obligation to transfer promised goods. Revenue is reported net of markdowns,
discounts and sales taxes collected from customers on behalf of taxing authorities. Revenue is also presented net of an allowance for
expected returns where contracts include the right of return.
 

 F-8 
 

 
The
Company estimates returns on an ongoing basis to estimate the consideration from the customer that the Company expects to ultimately
receive. Consideration in determining the Company’s estimates for returns may include agreements with customers, the Company’s
return policy and historical and current trends. The Company records the returns as a reduction to net sales in its consolidated statements
of operations and the recognition of a provision for returns within accrued expenses in its consolidated balance sheets and the estimated
value of inventory expected to be returned as an adjustment to inventories, net. As of March 31, 2024 and 2023, the returns provision
was $346 and $366, respectively.
 
Revenue
is comprised of direct-to-consumer ecommerce revenue through the Company’s website and revenue related to wholesalers. The following
table details the revenue split:
 
SCHEDULE
OF REVENUE SPLIT


  
March
    31, 2024  
March
    31, 2023 

Wholesale revenues 
$14,060  
$14,888 

Ecommerce revenues 
 10,383  
 8,550 

Total
    Revenues 
$24,443  
$23,438 

 
Revenue
is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers.
Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product.
This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. For direct-to-consumer
ecommerce revenue, the Company receives payment before the customer receives the promised goods. Revenue is only recognized once the
goods have been delivered to the customer. Sales to wholesale customers are recognized when the customer has control which will depend
on the agreed upon International Commercial Terms (“inco-terms”). For inventories sold on consignment to wholesalers, the
Company records revenue when the inventory is sold to the third-party customer by the wholesaler. The Company may issue merchant credits,
which are essentially refund credits. The merchant credits are initially deferred and subsequently recognized as revenue when tendered
for payment.

 
Cost
of goods sold
 
Cost
of goods sold includes the cost of purchased merchandise, which includes:
 


 
-
acquisition
    and production costs including raw material and labor as applicable;

 
 
 

 
-
the
    cost incurred to deliver inventory to the Company’s third-party distribution centers including freight, non-refundable taxes,
    duty, and other landing costs;

 
 
 

 
-
the
    service fees of the Company’s third-party fulfillment and distribution centers; and

 
 
 

 
-
reserves
    for inventory.

 

 F-9 
 

 
Accounts
receivable
 
Accounts
receivable primarily arise out of sales to wholesale accounts and ecommerce partners. The allowance for doubtful accounts represents
management’s best estimate of probable credit losses in accounts receivable using the incurred loss methodology. Receivables are
written off against the allowance when management believes that it is probable the amount receivable will not be recovered. Additionally,
the Company records higher allowances in the first and third quarters following its peak sales seasons after the Company determines it
to be probable that it will not collect the related receivables. As of March 31, 2024 and 2023, the Company had $558 and $341, respectively,
in allowances for doubtful accounts. Accounts Receivable, net of allowances, as of March 31, 2024 and 2023 was $1,035 and $997, respectively.
 
Geographic
concentration
 
Although
the Company is organized fundamentally as one business segment, the Company’s revenues are primarily split between three geographic
areas: the U.S., Europe and the United Kingdom (the “U.K.”). Customers in these regions are served by our leadership, production
and operations teams in the U.K. and Hong Kong.
 
The
table below reflects total net revenues attributed to Europe (excluding the United Kingdom), United States, United Kingdom, and the rest
of the world: 
SCHEDULE
OF NET REVENUE FROM GEOGRAPHIC AREAS



  
March
    31, 2024  
March
    31, 2023 

  
Year
    Ended 

  
March
    31, 2024  
March
    31, 2023 

  
   
  

Europe
    (excluding United Kingdom) 
$7,909  
32% 
$7,233  
31%

United
    States 
 9,935  
 41% 
 10,348  
44%

United
    Kingdom 
 4,845  
 20% 
 4,269  
18%

Rest
    of the World 
 1,754  
 7% 
 1,588  
7%

Total
    Revenues 
$24,443  
   
$23,438  
   


 
The
long-lived assets of the Company primarily relate to property and equipment, intangible assets and operating lease right-of-use assets
in the U.K. and Hong Kong. Total long-lived assets as of March 31, 2024 were $557 and $98 in the U.K. and Hong Kong, respectively. As
of March 31, 2023, total long-lived assets were $1,086 in the UK and $56 in Hong Kong.
 
Supplier
concentration
 
For
the years ended March 31, 2024 and 2023, the largest single supplier of manufactured goods, Everich Garments Group Ltd., produced 75%
and 72%, respectively, of the Company’s products. For the years ended March 31, 2024 and 2023, the largest fabric supplier, Toray
International Inc., supplied 79% and 70%, respectively, of the fabric used to manufacture the Company’s products.
 
Customer
concentration
 
For
the twelve months ended March 31, 2024, we had one customer that accounted for approximately 13%
or $3,168
of total revenues individually and in aggregate.
There was no
accounts receivable balance for this customer
as of March 31, 2024. The Company has ended its wholesale relationship with this customer as part of a broader strategy to enhance our
relationships with our entire customer base.
 
For
the twelve months ended March 31, 2023, we had one customer that accounted for approximately 12% or $2,786 of total revenues individually
and in aggregate. The related accounts receivable balance for this customer was approximately $41 as of March 31, 2023.
 

Accounts receivable
 
For
the twelve months ended March 31, 2024, we had two customers that accounted for approximately 27% of total accounts receivable. For the
twelve months ended March 31, 2023, we had one customer that accounted for approximately 18% of total accounts receivable.
 
Accounts payable
 
On
March 31, 2024, the three largest accounts payable accounts to our vendors represented 15%, 7% and 6%, respectively. On March 31, 2023,
the three largest accounts payable accounts to our vendors represented 56%, 5% and 3%, respectively.
 

 F-10 
 

 
Property
and Equipment
 
Property,
plant and equipment are recorded at cost less accumulated depreciation. Cost consists of purchase price, conversion cost and estimated
cost of dismantling and restoration. Expenditure such as repairs and maintenance, overhaul costs and borrowing costs are normally charged
to profit or loss when they are incurred. Expenditures resulting in increases in the future economic benefits of the property, plant
and equipment are capitalized.
 
Software
& Website Development costs are for applications and software with respect to operating our business. For such projects, planning
cost and other costs related to the preliminary project stage, as well as costs incurred for post-implementation activities, are expensed
as incurred. We capitalize costs incurred during the application development phase only when we believe it is probable the development
will result in new or additional functionality. The types of costs capitalized during the application development phase include fees
incurred with third parties for consulting, programming and other development activities performed to complete the software or website.
We amortize the assets on a straight-line basis over an estimated useful life of three years. If we identify any software or website
to be abandoned, the cost less the accumulated amortization, if any, is recorded as amortization expense.
 
The
residual values and useful lives of the property, plant and equipment are reviewed when there are indications that the residual value
or useful life of an asset has significantly changed following the end of the previous reporting period. If necessary, the residual value,
depreciation method or useful life of that asset is amended prospectively to reflect the new expectation. The following estimated useful
lives are used for the depreciation of property, plant and equipment:
 
SCHEDULE
OF ESTIMATED USEFUL LIVES IN PROPERTY AND EQUIPMENT 


  
Useful
    Life 
Method

Furniture and Fixtures 
5 years 
Straight-line

Office Equipment 
3-5 years 
Straight-line

Leasehold Improvements 
5 years 
Straight-line

Software & Website Development 
3 years 
Straight-line

Computer Equipment 
3 years 
Straight-line

 
Leases
 
At
lease commencement, which is generally when the Company takes possession of the asset, the Company records a lease liability and corresponding
right-of-use asset. Lease liabilities represent the present value of minimum lease payments over the expected lease term, which includes
options to extend or terminate the lease when it is reasonably certain those options will be exercised. The present value of the lease
liability is determined using the Company’s incremental borrowing rate as of lease commencement. Minimum lease payments include
base rent, fixed escalation of rental payments, and rental payments that are adjusted periodically depending on a rate or index. Non-lease
components are generally services that the lessor performs for the Company associated with the leased asset, such as common area maintenance.
 
Right-of-use
assets represent the right to control the use of the leased asset during the lease and are initially recognized in an amount equal to
the lease liability. In addition, prepaid rent, initial direct costs, and adjustments for lease incentives are components of the right-of-use
asset. Over the lease term, the lease expense is amortized on a straight-line basis beginning on the lease commencement date. A right-of-use
asset and lease liability are not recognized for leases with an initial term of 12 months or less, and the lease expense is recognized
on a straight-line basis over the lease term. As of March 31, 2024 and March 31, 2023, the Company has four property leases, which are
all accounted for as operating leases under ASC 842. Short-term leases are accounted for under the short-term lease practical expedient
of ASC 842.
 

 F-11 
 

 
Long-Lived
Assets
 
Long-lived
assets held for use, including intangible assets with finite lives, right-of-use assets and property, plant and equipment, are evaluated
for impairment when the occurrence of events or a change in circumstances indicates that the carrying value of the assets may not be
recoverable as measured by comparing their carrying value to the estimated undiscounted future cash flows generated by their use and
eventual disposition. Impaired assets are recorded at fair value, determined principally by discounting the future cash flows expected
from their use and eventual disposition. Reductions in asset values resulting from impairment valuations are recognized in income in
the period that the impairment is determined. No impairment
of long-lived assets was required for the years ended March 31, 2024 and 2023.
 
Income
Taxes
 
The
Company follows the liability method with respect to accounting for income taxes. Deferred income tax assets and liabilities are determined
based on the temporary differences between the carrying amounts and the tax bases of assets and liabilities, and for tax losses, tax
credit carryforwards, and other tax attributes. Deferred income tax assets and liabilities are measured using enacted tax rates, for
the appropriate tax jurisdiction, which are expected to be in effect when these differences are anticipated to reverse.
 
Deferred
income tax assets are reduced by a valuation allowance, if based on the weight of available evidence, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. The evaluation as to the likelihood of realizing the benefit of
a deferred income tax asset is based on the timing of scheduled reversals of deferred tax liabilities, taxable income forecasts, and
tax-planning strategies. The recognition of a deferred income tax asset is based upon several assumptions and forecasts, including current
and anticipated taxable income, the utilization of previously unrealized non-operating loss carryforwards, and regulatory reviews of
tax filings.
 
The
Company evaluates its tax filing positions and recognizes tax benefits that are considered more likely than not to be sustained
upon examination by the relevant taxing authorities based on the technical merits of the position. This determination requires the use
of significant judgment. Income tax expense is adjusted in the period in which an uncertain tax position is effectively settled, the
statute of limitations expires, facts or circumstances change, tax laws change, or new information becomes available. The Company’s
policy is to recognize interest expense and penalties related to income tax matters separately as an income or expense item.
 
Selling,
general and administrative expenses
 
Selling,
general and administrative expenses consist of all operating costs not otherwise included in cost of goods sold or marketing and advertising
expenses. The Company’s selling, general and administrative expenses include personnel costs, sales commissions, recruitment
fees, legal and professional fees, information technology, accounting, travel and lodging, occupancy costs and depreciation and amortization.
 
Foreign
currency
 
Foreign
currency transactions denominated in a currency other than an entity’s functional currency are remeasured into the functional currency
using the spot rate at the date of the transaction with any resulting gains and losses recognized in operating expenses except for gains
and losses arising on intercompany foreign currency transactions that are of a long-term investment nature, which are recorded as a foreign
currency translation adjustment in other comprehensive income or loss
 
The
functional currency for each entity included in these Consolidated Financial Statements that is domiciled outside of the United States
is generally the applicable local currency. Assets and liabilities of each foreign entity are translated into U.S. dollars at the exchange
rate in effect on the balance sheet date. Revenue and expenses are translated on a monthly basis using the average rate for that month
as a close approximation. Unrealized translation gains and losses are recorded as a foreign currency translation adjustment, which is
included in other comprehensive income or loss, which is a component of accumulated other comprehensive income or loss included in stockholders’
 equity (deficit).
 

 F-12 
 

 
Stock-based
compensation
 
The
Company accounts for equity based awards based on ASC 505 and 718, whereby the value of the award is measured on the date of grant
and recognized as compensation expense on a straight-line basis over the vesting period.
 
The
Company measures fair value as of the grant date for options and warrants using the Black Scholes option pricing model and for common
share awards using a weighted average of the Black Scholes method and probability-weighted expected return method (PWERM).
 
The
inputs into the Black Scholes option pricing model are subjective and generally require significant judgment. The fair value of the shares
of common and preferred stock has historically been determined by the Company’s management with the assistance of third-party specialists
as there was no public market for the common stock. The fair value is obtained by considering a number of objective and subjective factors,
including the valuation of comparable companies, sales of preferred stock to unrelated third parties, projected operating and financial
performance, the lack of liquidity of common and preferred stock and general and industry specific economic outlook, amongst other factors.
The expected term represents the period that the Company’s stock options are expected to be outstanding and is determined using
the simplified method (based on the mid-point between the vesting date and the end of the contractual term) as the Company’s stock
option exercise history does not provide a reasonable basis upon which to estimate expected term. Because the Company was privately held
for a portion of the periods covered by these financial statements and historically did not have an active trading market for its common
and preferred stock for a sufficient period of time, the expected volatility was estimated based on the average volatility for comparable
publicly traded companies, over a period equal to the expected term of the stock option grants. The Company listing on NYSE American
on February 8, 2024 and now uses the closing price on the day of grant to determine FMV and for the stock options issued in Q4 2024 the
company used the average of five similar companies based by one or all the following factors to determine volatility: industry, revenue,
market capitalization. The risk-free rate assumption is based on the U.S. Treasury zero coupon issues in effect at the time of grant
for periods corresponding with the expected term of the option. The Company has never paid dividends on its common stock and does not
anticipate paying dividends on common stock in the foreseeable future. Therefore, the Company uses an expected dividend yield of zero.
 
Income
/ loss per share of common stock
 
Basic
net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding
for the period. Diluted earnings per share is computed by dividing the net income applicable to common stockholders by the weighted average
number of shares of common stock outstanding plus the number of additional shares of common stock that would have been outstanding if
all dilutive potential shares of common stock had been issued using the treasury stock method. Potential shares of common stock are excluded
from the computation when their effect is antidilutive. The dilutive effect of potentially dilutive securities is reflected in diluted
net income per share if the exercise prices were lower than the average fair market value of common stock during the reporting period.
 
Potentially
dilutive stock options and securities as presented in the table below were excluded from the computation of diluted net income (loss)
per share, because the effect would be anti-dilutive. As the Company incurred losses in the years ended March 31, 2024 and 2023, basic
and diluted weighted-average shares are the same in the loss per share calculation, in accordance with ASC 260-10-45-20.
 

 F-13 
 

 
SCHEDULE
OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF DILUTED NET INCOME (LOSS) PER SHARE


  
March
    31, 2024  
March
    31, 2023 

Options to acquire common stock 
 1,108,356  
 299,957 

Restricted stock units to acquire stock 
 225,000  
 - 

Warrants to acquire common stock 
 66,700  
 - 

Series A convertible preferred stock 
 -  
 5,323,782 

Series B convertible preferred stock 
 -  
 1,189,998 

Convertible debt financing 
 -  
 2,815,463 

Antidilutive securities 
 1,400,056  
 9,629,200 

 
On
February 12, 2024, all outstanding shares of our Series A and Series B convertible preferred stock were automatically converted into
5,323,782
and 1,189,998
shares of common stock, respectively,
in connection with the closing of the initial public offering. The $10,002
in principal amount plus accrued interest in
the amount of $1,985
automatically converted into Company common stock, at 80%
of the initial public offering price into an aggregate of 2,497,267
shares of common stock (see note 11).
 
Fair
Value of Financial Instruments
 
The
Company follows the guidance of FASB ASC 820 and ASC 825 for disclosure and measurement of the fair value of its financial instruments.
FASB ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase
consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes
the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest
priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable
inputs.
 
The
three (3) levels of fair value hierarchy defined by ASC 820 are described below:
 


 
Level
    1:
Quoted
    market prices available in active markets for identical assets or liabilities as of the reporting date.

 
Level
    2:
Pricing
    inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the
    reporting date.

 
Level
    3:
Pricing
    inputs that are generally observable inputs and not corroborated by market data.

 
The
carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, and accounts
payable and accrued expenses approximate their fair value due to their short-term nature. The carrying values of capital lease obligations
and debt obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing
market interest rates. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest
or credit risks arising from these financial instruments.
 
Segment
Reporting
 
Accounting
Standards Codification (“ASC”) Topic 280, “Disclosures about Segments of an Enterprise and Related Information”
establishes standards for the way that public business enterprises report information about operating segments in annual financial statements
and requires those enterprises to report selected information about operating segments in interim financial reports issued to stockholders.
Management has determined that the Company operates in one business segment, product sales.


 
Reclassifications
 
The
Company has reclassified broker commission costs amounting to $687 previously classified as cost of sales for the year ended March 31,
2023 to selling, general and administrative expenses to conform to current year presentation.

 

 F-14 
 

 
Recently
Issued Accounting Pronouncements
 
In
September 2022, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2022-04, “Disclosure
of Supplier Finance Program Obligations” (“ASU 2022-04”). ASU 2022-04 requires entities to disclose the key terms of
supplier finance programs they use in connection with the purchase of goods and services, along with the amount of obligations outstanding
at the end of each period and an annual roll forward of such obligations. This standard does not affect the recognition, measurement,
or financial statement presentation of supplier finance program obligations. ASU 2022-04 is effective for the Company for the year ending
March 31, 2024 and is to be applied retrospectively to all periods in which a balance sheet is presented. The annual roll forward disclosure
is not required to be made until the year ending March 31, 2025 and is to be applied prospectively. The Company doesn’t believe
the adoption will have a material effect on the financial statements. Other than the new disclosure requirements, ASU 2022-04 will not
have an impact on the Company’s consolidated financial statements.
 
In
March 2023, the Financial Accounting Standards Board (“FASB”) ) issued ASU 2024-01 to amend the guidance in Accounting Standards
Codification (“ASC”) 718 Compensation—Stock Compensation (Topic 718). Some entities compensate employees or
other service providers by granting profits interest awards, which generally give the grantee an opportunity to participate in future
profits and/or equity appreciation of the entity but do not give them rights to existing net assets of the entity.  ASU 2024-01
adds an example showing how to apply the scope guidance in ASC 718 to determine whether profits interests and similar awards should be
accounted for as share-based payment arrangements. The ASU is effective for annual periods beginning after December 15, 2024, with early
adoption permitted. The Company does not currently anticipate that the guidance will have a material impact on its financial statements.
 
In November 2023, the FASB issued ASU 2023-07, Segment Reporting
(Topic 280): Improvements to Reportable Segment Disclosure, which is intended to improve reportable segment disclosure requirements,
primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating
decision maker and included in each reported measure of a segment’s profit or loss. The update also requires all annual disclosures
about a reportable segment’s profit or loss and assets to be provided in interim periods and for entities with a single reportable
segment to provide all the disclosures required by ASC 280, Segment Reporting, including the significant segment expense disclosures.
This standard will be effective for the Company on January 1, 2024 and interim periods beginning in fiscal year 2025, with early adoption
permitted. The updates required by this standard should be applied retrospectively to all periods presented in the financial statements.
The Company does not expect this standard to have a material impact on its results of operations, financial position or cash flows.
 
ASUs
recently issued but not listed above were assessed and determined to be either not applicable or are expected to have minimal impact
on the consolidated financial position or results of operations.
 
3. INVENTORIES
 
Inventories
are initially measured at cost and subsequently measured at the lower of cost or net realizable value. Cost is determined on a first-in,
first-out basis. The following table details the primary categories for the periods presented.
 
SCHEDULE
OF INVENTORY


  
March
                                                                                 31, 2024  
March
                                                                                 31, 2023 

  
$’000  
$’000 

Finished goods 
$2,680  
$2,685 

Raw materials 
 721  
 585 

Goods in transit 
 14  
 - 

Finished goods on
    consignment 
 205  
 - 

Total inventories 
 3,620  
 3,270 

Inventory reserve 
 (1,390) 
 (1,008)

Total inventories, net 
$2,230  
$2,262 

 
Third-party
services are used to warehouse and distribute inventory. Per the terms of one third-party service contract, a lien may be placed on the
Company’s inventory if the Company fails to make a payment for services within 30 days from the date the third-party supplier notifies
the Company of an outstanding payment.
 
4. PREPAID AND OTHER CURRENT ASSETS
 
Amounts
recorded in prepaid and other current assets are expected to be realized within one year. The following table describes the major items
for the periods presented.
 
SCHEDULE
OF PREPAID AND OTHER CURRENT ASSETS 


  
March
    31, 2024  
March
    31,  2023 

  
$’000  
$’000 

Deposits and prepayments 
 436  
 150 

Prepaid marketing costs 
 -  
 185 

Other receivables 
 306  
 373 

Total 
 742  
 708 

 
Prepaid
marketing costs relate to the provision of marketing services to be provided over an 18-month service period by two non-employees.
 

 F-15 
 

 
5. PROPERTY AND EQUIPMENT
 
Property
and equipment consisted of the following:
 SCHEDULE OF PROPERTY AND EQUIPMENT


  
March
    31, 2024  
March
    31,  2023 

  
$’000  
$’000 

Furniture and Fixtures 
$177  
$177 

Office Equipment 
 57  
 52 

Leasehold Improvements 
 29  
 29 

Software and Website Development 
 1,886  
 1,676 

Computer Equipment 
 121  
 91 

Property and equipment, gross 
 2,270  
 2,025 

Accumulated depreciation 
 (1,768) 
 (1,192)

Property and equipment,
    net 
$502  
$833 

 
Depreciation
expense related to property, plant and equipment was $555 million and $547 million in the years ended March 31, 2024 and 2023, respectively.
 
6. LEASES
 
The
Company has obligations under operating leases for its offices. As of March 31, 2024 and 2023, the lease terms of the various leases
are less than 24 months. The majority of the Company’s leases include renewal options at the sole discretion of the Company. In
general, it is not reasonably certain that lease renewals will be exercised at lease commencement
and therefore lease renewals are not included in the lease term.
 
The
following table details the Company’s net lease expense. The variable lease expenses disclosed below include contingent rent payments
and other non-fixed lease related costs, including common area maintenance, property taxes, and landlord’s insurance.
SCHEDULE OF  LEASE EXPENSE 


Lease expense 
March 31, 2024  
March 31, 2023 

  
Years
    Ended 

Lease expense 
March 31, 2024  
March 31, 2023 

  
$’000  
$’000 

Net lease expense: 
    
   

Operating
    lease expense 
$299  
$210 

Total lease expense 
$299  
$210 

  
    
   

Weighted-average remaining lease term - Years 
 1.53  
 0.96 

Weighted-average discount rate 
 5% 
 9%

 
SCHEDULE OF LEASE BALANCE SHEET CLASSIFICATION


Balance
    sheet classification 
March 31, 2024  
March 31, 2023 

  
$’000  
$’000 

Right-of-use
    assets 
$143  
$297 

  
    
   

Current lease liabilities 
$101  
$299 

Non-current lease liabilities 
 44  
 8 

Total operating lease
    liabilities 
$145  
$307 

 

 F-16 
 

 
SCHEDULE OF FUTURE MATURITY OF LEASE LIABILITIES


Maturity
    of lease liabilities 
March 31, 2024  
March 31, 2023 

  
$’000  
$’000 

Within one year 
$109  
$318 

Within one to two years 
 45  
 9 

Total lease payments 
 154  
 327 

Discount rate 
 (9) 
 (20)

Present value of lease liabilities 
$145 
$307 

 
7. ACCRUED EXPENSES
 
SCHEDULE
OF ACCRUED EXPENSES


  
March 31, 2024  
March 31, 2023 

  
$’000  
$’000 

Accrued expenses 
$1,002  
$606 

Returns provision 
 298  
 366 

Accrued import duties 
 294  
 - 

Merchant credit 
 63  
 61 

Indirect taxes 
 1,040  
 357 

Total 
$2,697  
$1,390 

 
The
returns provisions are comprised of returns due from both wholesale and partner customers and direct-to-consumer customers.
 
8. TRADE FINANCE FACILITY
 
SCHEDULE OF TRADE FINANCE FACILITY


  
March
                                                                                 31, 2024  
March
                                                                                 31, 2023 

  
$’000  
$’000 

Trade finance
    facility 
$-  
$26 

Total 
$-  
$26 

 
The
Company, through PMA, has a trade finance facility extended on goods for which letters of credit are issued to the Company’s suppliers
by HSBC. As of March 31, 2024 and March 31, 2023, the outstanding balance under the trade finance facility was $0 and $26, respectively,
and the Company had an available trade finance facility of $5.0 million. As of March 31, 2024, there were no outstanding pledged letters
of credit by HSBC. The trade finance facility does not become the Company’s responsibility until the Company receives the manufactured
clothing goods from suppliers. Once drawn, the company has 120 days credit on the loan before repayment is due. For drawings in Hong
Kong dollars, the interest rate equals HIBOR plus 3.0%, and for drawings in U.S. dollars, the interest rate equals SOFR plus 3.3%. The
trade finance facility was originally secured by a standby documentary credit for $1.0 million from UBS Switzerland AG and a personal
guarantee to the value of $4.0 million from the Chairman of our board of directors, Max Gottschalk, and a $3,150 corporate guarantee
from Perfect Moment (UK) Limited. The UBS standby documentary credit expired on April 30, 2023 and the facility was then secured by charge
over cash deposits equal to the amount of the facility used at any given moment in time in addition to the aforementioned personal and
corporate guarantees. On May 31, 2023, the UBS standby documentary credit was reinstated for $1.0 million, which standby documentary
credit was secured by a guarantee from Joachim Gottschalk & Associates, Ltd. (“JGA”). The UBS standby documentary credit
was extended on November 26, 2023 through January 26, 2024 at a 10% interest rate. The JGA guarantee is in addition to the $4.0 million
personal guarantee of the trade finance facility by Mr. Gottschalk. The UBS standby documentary credit was not extended and the $3,150
corporate guarantee from Perfect Moment (UK) Limited was replaced with a $2,000 corporate guarantee from Perfect Moment, Limited. The
JGA guarantee accrued interest between 8% and 10% per annum, payable by the Company. The Company utilized $1,847 of borrowings under
the facility, all of which was repaid by March 31, 2024. The trade finance facility is also secured by a guarantee by Perfect Moment
Ltd. in the amount of $2.0 million.
 
The interest paid on the JGA personal guarantee for the years ended March
31, 2024 and 2023 was $56 and $33, respectively.
 

 F-17 
 

 
9. CONVERTIBLE DEBT OBLIGATIONS
 
SCHEDULE
OF CONVERTIBLE DEBT OBLIGATIONS


  
December
                                                                                 31, 2023  
March
                                                                                 31, 2023 

  
$’000  
$’000 

Convertible debt 
$-  
$11,262 

Unamortized debt discount 
 -  
 (492)

Total Convertible debt
    obligations 
$-  
$10,770 

 
In
March 2021, the Company entered into an arrangement whereby the Company completed convertible debt financing (“2021 Debt
Financing”), from 47 investors, for gross proceeds of $6,000,
less $841
of debt issuance costs, at an 8%
interest rate to provide working capital for its operations. Between April and July 2022, the Company received further convertible
debt financing (“2022 Debt Financing”) from 47 investors with gross proceeds of $4,000,
less $531
of debt issuance costs, that rank pari passu to the 2021 Debt Financing at an 8%
interest rate. The debt issuance costs were amortized over the life of the convertible debt. The Company’s convertible debt obligations are secured by a security interest over the assets of Perfect Moment
Ltd. and its subsidiaries.
 
The 2021 Debt Financing had a maturity date of December 15, 2023. In December
2023 and January 2024, the maturity date of all convertible promissory notes was extended to February 14, 2024. Upon the closing of an
IPO, prior to the redemption date, the convertible debt was convertible into the Company’s common stock at a conversion price equal
to 80% of the public offering price of the Company’s common stock in the IPO. The
2021 Debt Financing had a maturity date of December 15, 2023. In December 2023 and January 2024, the maturity date of all convertible
promissory notes was extended to February 14, 2024.
 
As
of March 31, 2023, the convertible debt obligations comprised gross proceeds of 10,002
and accrued interest of $1,260.
On February 12, 2024, $10,002
in principal amount plus accrued interest in
the amount of $1,985
automatically converted into the Company’s
common stock, at 80%
of the initial public offering price into an aggregate of 2,497,267
shares of common stock (see note 10).
 
The
unamortized debt discount is the related arrangement fees that are being amortized against the convertible debt obligations on the consolidated
balance sheets. As of March 31, 2023, the balance of unamortized debt discount was $492. Upon closing of the IPO in February 2024,
the unamortized balance of debt discount of $492 was charged to interest expense.

 
10. COMMON STOCK
 
Common
stock
 
The
following were Common Stock transactions during the year ended March 31, 2024:
 
Sale
of common stock from private placement
 
During
May to August 2023, the Company issued 409,050 shares of common stock at a par value of $0.0001 and a purchase price of $6.00 per share.
The total net proceeds were $2,179, net of broker fees and expenses. The holders of the common stock shall be entitled to cast one vote
for each share held at all stockholder meetings and have no right to subscribe to or purchase any new or additional issue of shares.
 

 F-18 
 

 
Shares
and Warrants Issued as Part of the Company’s Underwritten Public Offering
 
On
February 7, 2024, the company entered into an underwriting agreement with ThinkEquity LLC, as representative (the “Representative”)
of the several underwriters identified therein, relating to the Company’s initial public offering (the “IPO”) of 1,334,000
shares of the Company’s common stock, par value $0.0001 per share. The Company previously filed the form of underwriting agreement
as an exhibit to the Company’s registration statement on Form S-1, as amended from time to time (File No. 333-274913), which was
declared effective by the Securities and Exchange Commission on February 7, 2024. The price per share to the public was $6.00 generating
gross proceeds of $8,004. The Company also granted the Underwriters a 45-day option to purchase up to 200,100 additional shares of Common
Stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the IPO.
 
The
number of shares of common stock outstanding after this offering was 15,578,449 as of February 7, 2024, that included the previously
issued and outstanding of 5,233,402, the 1,334,000 shares issued as part of this offering plus (i) the automatic conversion of all outstanding
shares of our Series A convertible preferred stock into 5,323,782 shares of common stock, (ii) the automatic conversion of all outstanding
shares of our Series B convertible preferred stock into 1,189,998 shares of common stock and (iii) the automatic conversion, in connection
with the closing of this offering (closing on February 12, 2024), of $10,002 in principal amount plus accrued interest in the amount
of $1,985 under our 8% senior subordinated secured convertible promissory notes (the “2021 Notes”) and our 8% senior subordinated
secured convertible promissory notes (the “2022 Notes” and, together with the 2021 Notes, the “Notes”), at 80%
of the initial public offering price into an aggregate of 2,497,267 shares of common stock.
 
On
February 12, 2024, the Company consummated the IPO and issued 1,334,000
shares of Common Stock for aggregate net proceeds
of approximately $6,009,
after deducting underwriting discounts and commissions and estimated offering expenses. The Company intends to use the proceeds for general
corporate purposes, including working capital, sales and marketing activities and general and administrative matters. Concurrently with
the closing of the IPO, the Company also issued warrants to purchase up to 66,700
shares of Common Stock to the Representative
and its designees, at an exercise price of $7.50
per share (the “Underwriter Warrants”).
The Underwriter Warrants are exercisable beginning on August 5, 2024, and expire on February
7, 2029.
 
The
following were Common Stock transactions during the year ended March 31, 2023:
 
Shares
issued for services
 
During
2021, the Company engaged several consultants to provide services relating to the IPO who were compensated with common stock awards. The shares subject to clawback provisions remain unvested until the related performance condition is met. If
clawback features are triggered, the unvested shares will be returned to the Company.
 
In
January and March 2021, 2,000,000
shares of common stock with a total fair value
of $7,000
were issued to certain non-employees in exchange
for consulting and advisory services to be performed relating to the 2021 share exchange and the 2021 convertible debt financing, of
which 50% were subject to clawback contingent upon an IPO. As services were relating to, and contingent upon execution of an IPO, no
expense was recognized for the shares subject to clawback, until occurrence of an IPO. During the year ending March 31, 2023,
the consultants performed additional services and the Company agreed to remove the clawback provision and the $3,500
fair value for the remaining 1,000,000
shares of common stock was recognized within
selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss during the year ending
March 31, 2023. No further shares were issuable under these agreements.
 


 F-19 
 


 
In
October 2021, 75,000 shares of common stock with a total fair value of $295 were issued to a consultant in exchange for legal services
to be performed relating to an IPO subject to a 100% clawback provision in the event that an IPO is not achieved. As services were relating
to and contingent upon execution of an IPO, no expense was recognized until occurrence of an IPO. During the nine months ended December
31, 2022, the Company entered into an agreement to remove the clawback provision and the fair value of $295 was recognized within selling,
general and administrative expenses in the consolidated statements of operations and comprehensive loss during the three months then
ended. As of December 31, 2023 and March 31, 2023, no further shares were issuable under this agreement.
 
In
relation to the above consulting and advisory services, the Company had granted rights to six holders of our common stock, to be issued
additional shares of our common stock if the IPO price per share was less than $5.00, as adjusted for any stock split or combination
prior to the IPO, or if we sold our equity securities before the closing of the IPO at the purchase price per share or conversion price
per share that is less than $5.00, as adjusted for any stock split or combination prior to the IPO. Since the IPO price was greater than
$5.00, this provision was not triggered.
 
The
Company issued a total 1,075,000
and charged APIC $3,795
related to services rendered during the year
ended March 31, 2023.
 
11. PREFERRED STOCK
 
Series A Preferred Stock
 
On
March 15, 2021, PMA, the former parent entity, engaged in a share for share exchange with the Company, thereby creating the Company as
the ultimate parent company. As part of the share for share exchange, existing PMA stockholders’ equity was exchanged for
an equivalent amount of share capital in the Company in the form of common stock and preferred stock. As a result of the transaction,
5,323,782
shares of Series A Convertible Preferred Stock (“Series A Stock”) with a $0.0001
par value were issued to existing PMA shareholders for nil consideration. The Series A Stock could be voluntarily converted into
shares of common stock at the request of the Series A stockholder by providing written notice. The
Series A Stock was also subject to mandatory conversion into common stock upon either an IPO or by vote or written consent of at least
66 2/3% holders of the outstanding shares of the Series A Stock. The conversion was at a rate of one share of Series A Stock for
one share of common stock without payment of additional consideration. The holders of Series A Stock were entitled to receive dividends
as if the conversion to common stock had taken place, if and when dividends are declared. Such dividends take preference to dividends
paid on shares of common stock and are non-cumulative. The holders of the Series A Stock were entitled to vote based on the equal number
of whole shares of common stock into which the shares of Series A Stock are convertible as of the date of the vote. The Series A Stock
with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Company or deemed liquidation event ranked
senior to both the common stock and any other class of stock which specifically ranks junior to the Series A Stock.
 
On
February 12, 2024, all outstanding shares of our Series A convertible preferred stock were automatically converted into 5,323,782 shares
of common stock in connection with the closing of the initial public offering
 
Series
B Preferred Stock
 
On
September 23, 2022, the Company authorized the issuance and sale of up to 1,200,000 shares of Series B Convertible Preferred Stock (“Series
B Stock”), with a par value of $0.0001 per share and a purchase price of $5.00 per share. A total of 1,189,998 shares of Series
B Stock was issued between September 2022 and November 2022, for net proceeds of $5,200, net of broker fees of $750. The Series B Stock
could be voluntarily converted into shares of common stock at the request of the Series B stockholder by providing written notice. The
Series B Stock was also subject to mandatory conversion into common stock upon either an IPO or by vote or written consent of at least
66 2/3% holders of the outstanding shares of the Series B Stock without payment of additional consideration. The conversion was determined
by dividing the original issue price by the conversion price in effect at the time of conversion. The initial conversion price was set
at $5.00 per share. The holders of Series B Stock were entitled to receive dividends as if the conversion to common stock had taken place,
if and when dividends are declared. Such dividends took preference to dividends paid on shares of common stock and are non-cumulative.
The holders of the Series B Stock were entitled to vote based on the equal number of whole shares of common stock into which the shares
of Series B Stock were convertible as of the date of the vote. The Series B Stock, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of the Company or deemed liquidation event, ranked pari passu with the Series A Stock.
 
On
February 12, 2024, all outstanding shares of our Series B convertible preferred stock were automatically converted into 1,189,998 shares
of common stock in connection with the closing of the initial public offering (see note 11).
 

 F-20 
 

 
12. RESTRICTED STOCK UNITS
 
Restricted
Stock Units
 
A
summary of restricted stock unit activity for the years ended March 31, 2024 and 2023 are presented below.
 SCHEDULE OF RESTRICTED STOCK UNIT ACTIVITY


  
   
   
Weighted- 

  
   
   
Average 

  
   
   
Grant Date 

  
Shares  
Fair
    Value  
Fair
    Value 

  
   
   
  

Non-vested at March 31, 2023 
 -  
$-  
$- 

Granted 
 300,000  
 1,230  
 4.10 

Vested/deemed vested 
 (75,000) 
 (429) 
 4.10 

Forfeited 
 -  
 -  
 - 

Non-vested at March 31, 2024 
 225,000  
$801  
$4.10 



 
During
the year ended March 31, 2024, the Company granted 300,000
shares of its restricted stock to an employee.
The Restricted Stock Units vest equally over four years, starting on the contractual start date of November 7, 2022. These Restricted
Stock Units were valued based on market value of the Company’s stock price at the respective date of grant and had aggregate fair
value of $1,230,000,
which is being amortized as stock compensation expense over its vesting term. During the year ended March 31, 2024, 75,000
shares with a fair value of $429
vested during the period.


 

 F-21 
 

 
13. STOCK OPTIONS
 

The
Company maintains the 2021 Equity Incentive Plan (the “2021 Plan”), which provides for the grant of incentive stock
options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and performance
units and performance shares to employees, directors and consultants of the Company or any parent or subsidiary of the Company. The
purpose of the 2021 Plan is to enable the Company to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to employees, directors and consultants of the Company or any parent or subsidiary
of the Company, and to promote the success of the Company’s business. The Company has 2,527,944 shares
available to issue from the 2021 plan as of March 31, 2024. The Company has historically granted stock options to non-employees in
exchange for the provision of services, both under the 2021 Plan and outside of the 2021 Plan.

 
A
summary of option activity for the years ended March 31, 2024 and 2023 are presented below:
  SCHEDULE
OF STOCK OPTION ACTIVITY


  
   
   
Weighted-  
  

  
   
Weighted-  
Average  
  

  
   
Average  
Remaining  
Aggregate 

  
   
Exercise  
Contractual  
Intrinsic 

  
Options  
Price  
Life
    (Years)  
Value 

  
   
   
   
  

Outstanding at March 31, 2022 
 545,378  
$1.32  
 3.2  
$1,190 

Granted 
 136,344  
 0.01  
 -  
 - 

Forfeited 
 (381,766) 
 (0.63) 
 -  
 - 

Exercised 
 -  
 -  
 -  
 - 

Outstanding at March 31, 2023 
 299,956  
 1.60  
 1.94  
 1,320 

Granted 
 808,400  
 4.10  
 -  
 - 

Forfeited 
 -  
 -  
 -  
 - 

Exercised 
 -  
 -  
 -  
 - 

Outstanding at March 31, 2024 
 1,108,356  
$3.42  
 3.42  
$595 

  
    
    
    
   

Vested March 31, 2024 
 387,784  
$2.19  
    
$594 

  
    
    
    
   

Exercisable at March 31, 2024 
 366,898  
$2.08  
    
$594 

 
During
the year ended March 31, 2023, the Company granted stock options to an employee to purchase 136,344
shares of Common Stock for services rendered.
The options have an exercise price of $0.01
per share, expire in five
years, vesting 20% on July 1, 2022 and
then equally over four years from July 1, 2022. The total fair value of these options at grant date was approximately $200
using a third-party valuation. 
 


During
the year ended March 31, 2024, the Company granted stock options to employees and the Board of Directors to purchase a total 808,400
shares of Common Stock for services rendered.
The options have an exercise price of $4.10
per share, expire between five
and ten
years, vesting equally over four years from various
dates. The total fair value of these options at grant date was approximately $3,039
using the Black-Scholes Option Pricing model.


 
The
total stock compensation expense recognized related to vesting of stock options for the years ended March 31, 2024 and March 31, 2023
amounted to $310 and $241, respectively. As of March 31, 2024 the total unrecognized stock-based compensation was $2,527, which is expected
to be recognized as part of operating expense through January 2028.

 
At
March 31, 2024, the intrinsic value of the outstanding options under the 2021 Plan was $595.
 

The
fair value of the share option awards was estimated using the Black-Scholes method and probability-weighted expected return method (PWERM)
based on the following weighted-average assumptions:
 SCHEDULE
OF FAIR VALUE OF SHARE OPTION AWARDS


  
Year Ended  
Year Ended 

  
March 31,  2024  
March 31,  2023 

  
   
  

Expected life in years 
 5.0
and
                                            10.0  
 3.5 

Stock price volatility 
 129.1% 
 40%-45%

Risk free interest rate 
 1.74-1.81% 
 0.37%-0.49%

Expected dividends 
 0% 
 0%

Forfeiture rate 
 25.7% 
 0%



 
14. STOCK WARRANTS
 
A
summary of warrant activity for the years ended March 31, 2024 and 2023 are presented below:
 SCHEDULE OF WARRANTS ACTIVITY


  
   
   
Weighted-  
  

  
   
Weighted-  
Average  
  

  
   
Average  
Remaining  
Aggregate 

  
   
Exercise  
Contractual  
Intrinsic 

  
Options  
Price  
Life
    (Years)  
Value 

  
   
   
   
  

Outstanding at March 31, 2023 
 -  
 -  
 -  
 - 

Granted 
 66,700  
 7.50  
 -  
           - 

Forfeited 
 -  
 -  
 -  
 - 

Exercised 
 -  
 -  
 -  
 - 

Outstanding at March
    31, 2024, all vested 
 66,700  
$7.50  
 4.87  
$- 

 

 F-22 
 

 
On
February 12, 2024, the Company granted warrants to purchase a total of 66,700
shares of Common Stock as part of a public offering,
which remain outstanding as of March 31, 2024. The warrants are exercisable at an average price of $7.50
per share and will expire on February 12, 2029.
See Note 11, Common Stock, for additional information.


 
As of March 31,
2024 the outstanding warrants had no intrinsic value.

 
15. INCOME TAXES
 
Income
tax (benefit) expense
 
Components
of income tax (benefit) expense were as follows:
 SCHEDULE OF INCOME TAX BENEFIT EXPENSE


  
March
    31, 2024  
March
    31, 2023 

  
Years
    Ended 

  
March
    31, 2024  
March
    31, 2023 

  
$’000  
$’000 

  
   
  

Current 
$     - 
$(121)

Deferred 
 -  
 - 

Total income tax (benefit)
    expense 
$-  
$(121)

 
Reconciliation
 
The
reconciliation of income taxes computed at the U.S. federal statutory tax rate to our income tax (benefit) expense is as follows:
 SCHEDULE OF RECONCILIATION OF INCOME TAXES


  
March 31, 2024  
March 31, 2023 

  
$’000  
$’000 

  
   
  

Loss before income tax at 21% rate 
$(1,831) 
$(2,189)

Change in valuation allowance 
 1,211  
 2,097 

Foreign tax differential 
 102  
 55 

Other permanent items 
 518  
 37 

R&D tax credit 
 -  
 (121)

Income tax (benefit)
    expense 
$-  
$(121)

 
The
Company’s effective tax rate for the years ended March 31, 2024 and 2023 differed from the applicable federal statutory rate of
21.0% primarily due to the impact of the valuation allowance on the Company’s deferred tax assets, as disclosed below.
 

 F-23 
 

 
Deferred
tax assets and liabilities
 
Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were
as follows:
 SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES


  
March 31, 2024  
March 31, 2023 

  
$’000  
$’000 

Deferred tax liabilities: 
    
   

Fixed and intangible
    assets 
$113  
$101 

Inventory 
 -  
 - 

Total
    deferred tax liabilities 
 113  
 101 

Deferred tax assets: 
    
   

Tax loss carryforward 
 7,312  
 6,352 

Stock compensation expense 
 535  
 197 

IPO expenses 
 163  
 - 

Valuation
    allowance 
 (7,897) 
 (6,448)

Total
    deferred tax assets 
 113  
 101 

Deferred tax assets,
    net 
$-  
$- 

 
Income
tax payments and refunds
 
During
the year ended March 31, 2023, the Company received a tax repayment of $121,
in respect to research and development tax credits.
During the years ended March 31, 2024 and 2023, the Company did not make any income tax payments.
 
Valuation
allowance
 
During
the years ended March 31, 2024 and 2023, the Company recorded an increase in the valuation allowance of $1,449 and $1,935,
respectively, related to federal deferred tax assets.
Deferred tax assets are recorded related to net operating losses and temporary differences between the book and tax bases of assets and
liabilities expected to produce tax deductions in future periods. The realization of these assets depends on recognition of sufficient
future taxable income in specific tax jurisdictions in which those temporary differences or net operating losses are deductible. In assessing
the need for a valuation allowance on deferred tax assets, we consider whether it is more likely than not that some portion or all of
them will not be realized.
 
Throughout
the year ended March 31, 2024, the Company has been assessing the realizability of its deferred tax assets by considering positive
factors such as the next three years’ profit projection making it more likely than not that the Company will be able to recognize
a deferred tax asset on losses. Based upon historical performance of the Company, a valuation allowance of 100%
was recorded as there is currently no significant evidence to indicate realizability of deferred tax assets. During 2024, the
Company recorded a valuation allowance of 100%
of UK and Hong Kong losses. As of March 31, 2024 and 2023, the Company’s valuation allowance was $7,897 and $6,448,
respectively.

 
16. FOREIGN CURRENCY TRANSLATION
 
We
report all currency amounts in USD. The Company’s subsidiaries in UK, Hong Kong and Switzerland maintain their books and records
in their functional currencies, which are GBP, HKD and CHF, respectively.
 
When
consolidating the subsidiaries with non-USD functional currencies, we translate the amounts of assets and liabilities into USD using
the exchange rate on the balance sheet date, and the amounts of revenue and expense are translated at the average exchange rate prevailing
during the period. The gains and losses resulting from translation of financial statement amounts into USD are recorded as a separate
component of accumulated other comprehensive loss within Stockholders’ equity (deficit).
 

 F-24 
 

 
We
used the exchange rates in the following table to translate amounts denominated in non-USD currencies as of and for the periods noted:
 SCHEDULE OF  FOREIGN CURRENCY TRANSLATION


Year end
    exchange rate: 
March 31, 2024  
March 31, 2023 

  
   
  

GBP:USD 
 1.26254  
 1.23682 

HKD:USD 
 0.12778  
 0.12739 

CHF:USD 
 1.10871  
 1.09521 

Year end exchange rate 
 1.10871  
 1.09521 

 


Average
    exchange rate: 
March 31, 2024  
March 31, 2023 

  
Years
    Ended 

Average
    exchange rate: 
March 31, 2024  
March 31, 2023 

  
   
  

GBP:USD 
 1.27055  
 1.20549 

HKD:USD 
 0.12782  
 0.12756 

CHF:USD 
 1.12514  
 1.04924 

Average exchange rate 
 1.12514  
 1.04924 

 
The
following table, reported in USD, disaggregates our cash balances by currency denomination:
 SCHEDULE OF CASH BALANCES BY CURRENCY DENOMINATION


Cash denominated
    in: 
March 31, 2024  
March 31, 2023 

  
$’000  
$’000 

  
   
  

USD 
$7,187  
$3,325 

GBP 
 598  
 447 

HKD 
 27  
 21 

CHF 
 14  
 18 

EUR 
 84  
 895 

CNY 
 -  
 6 

Cash 
$7,910  
$4,712 

 
Our
cash primarily consists of funds held in bank accounts and third party payment platforms.
 SCHEDULE OF FUNDS HELD IN BANK AND THIRD PARTY PAYMENT PLATFORMS


  
    
   

Cash held by Chase 
$6,180  
$- 

Cash held by HSBC 
 1,637  
 4,405 

Cash held by other banks 
 45  
 66 

Cash held by third party payment platforms 
 46  
 239 

Petty cash 
 2  
 2 

Total Cash 
$7,910  
$4,712 

 
The
Company maintains the majority of cash at HSBC where the balances are insured by the Federal Deposit Insurance Corporation (FDIC) up
to $250,000.
At times, the cash balances may exceed the FDIC-insured limit. As of March 31, 2024, we do not believe we have any significant
concentrations of credit risk due to the strong credit rating of HSBC and the cash balance is expected to be utilized within 6 months
to fund working capital requirements. The cash held by other banks is within the FDIC insured amount and cash held by third party payment
platforms are short term timing balances.
 
17. COMMITMENTS AND CONTINGENCIES
 
Legal
proceedings - The Company is, from time to time, involved in routine legal matters, and audits and inspections by governmental
agencies and other third parties which are incidental to the conduct of its business. This includes legal matters such as initiation
and defense of proceedings to protect intellectual property rights, liability claims, employment claims, and similar matters. The Company
believes the ultimate resolution of any such legal proceedings, audits, and inspections will not have a material adverse effect on its
consolidated balance sheets, results of operations or cash flows.
 

 F-25 
 

 
On
December 20, 2023, Aspen Skiing Company, LLC filed a complaint against the Company in the United States District Court for the District
of Colorado, alleging, among other things, trademark infringement, false association, false endorsement, unfair competition and deceptive
trade practices by the Company. Management has determined, after the advice of legal counsel, that the claims and actions related to
such complaint are not expected to have a material adverse effect on our financial condition because management believes that the lawsuit
will not succeed on the merits and the risk of any material loss is remote. The claims relate to the Company’s social media posts
of models and influencers in ski gondolas on the mountain owned by Aspen Skiing Company and now discontinued limited edition clothing
sold by the Company that included images, which were licensed by the Company from a photographer, of a skier’s rest area in Aspen
that Aspen Skiing Company calls the “AspenX Beach Club.” The complaint seeks injunctive relief, but no motion for injunctive
relief has been filed in the suit. The complaint also seeks delivery of all infringing material to Aspen Skiing Company and an award
of the Company’s profits and Aspen Skiing Company’s damages in an amount to be determined at trial, costs incurred by Aspen
Skiing Company in the action, their attorney’s fees and treble damages. Although the results of such litigation matters
and claims cannot be predicted with certainty, we believe that the final outcome of such ordinary, routine litigation will not have a
material adverse impact on our financial position, liquidity, or results of operations.

 
Capital
commitments - The Company had no
purchase obligations as of March 31, 2024, related to purchase
orders to factories for the manufacture of finished goods. All future obligations are to be financed by HSBC letters of credit and comprise
the balance held as restricted cash on the consolidated balance sheets.
 
18. RELATED PARTY TRANSACTIONS
 
Consulting
Agreements with Directors

 
Certain
directors of the Company and its subsidiaries, provided consulting and advisory services for the Company which are included in the selling,
general and administrative expenses in the accompanying consolidated statement of operations for the years then ended. As of March 31,
2024 and 2023, $0 and $22 was unpaid, respectively, which was included in accrued expenses as of the years then ended. Below are the
directors of the Company that provided the consulting and advisory services:
 SCHEDULE OF DIRECTORS COMPANY SUBSIDIARIES


  
March 31, 2024  
March 31, 2023 

  
Years
    Ended 

  
March 31, 2024  
March 31, 2023 

  
$’000  
$’000 

  
   
  

(A)
    Max Gottschalk (director of the Company) 
 181  
 135 

(B)
Jane Gottschalk (director of the Company) 
 -  
 48 

(C)
Tracy Barwin (director of the Company) 
 121  
 89 

(D)
    Andreas Keijsers (director of a subsidiary) 
 22  
 48 

Expenses for Related Parties 
 324  
 320 

 



(A)We,
                                            through PMA, are party to a consulting agreement with Max Gottschalk, dated May 15, 2019,
                                            which continues until terminated in accordance with its terms, during which Mr. Gottschalk
                                            is entitled to receive fees for services rendered amounting to £8,000
per
                                            month from April 2021 to November 2022 and £12,000
per
                                            month since December 2022. These amounts are in lieu of any other cash payments or equity
                                            awards Mr. Gottschalk may otherwise have been entitled to receive as a member of our board
                                            of directors.
 

(B)We,
                                            through PMA, were party to a consulting agreement with Jane Gottschalk, dated April 30, 2018,
                                            pursuant to which Ms. Gottschalk was entitled to receive £8,000
per
                                            month since April 1, 2019, for services rendered. These amounts are in lieu of any other
                                            cash payments or equity awards Ms. Gottschalk may otherwise have been entitled to receive
                                            as a member of our board of directors. The consulting agreement was terminated effective
                                            September 1, 2022, after which Ms. Gottschalk became an employee of PMUK.
 

(C)We
                                            were party to a consulting agreement with Tracy Barwin, dated November 18, 2022, pursuant
                                            to which Ms. Barwin was entitled to receive £1,500
per
                                            day for services rendered with a minimum commitment of two days per month. These amounts
                                            were in lieu of any other cash payments or equity awards Ms. Barwin may otherwise have been
                                            entitled to receive as a member of our board of directors. The consulting agreement with
                                            Ms. Barwin was terminated in October 2023 and replaced by an independent director agreement.
 

(D)We,
                                            through PMA, were party to a consulting agreement with Arnhem Consulting Limited (“Arnhem”),
                                            a company controlled by Andre Keijsers, dated February 28, 2017, pursuant to which Arnhem
                                            was entitled to receive £1,200
per
                                            month for services rendered. The consulting agreement was terminated in September 2023 as
                                            a result of Mr. Keijsers becoming a director of the Company.


 

 F-26 
 




 
Other

 
The
Company has engaged Deliberate Software Limited (“Deliberate”) as a supplier for IT services amounting to $383 and $321 for
the years ended March 31, 2024 and 2023, respectively, recognized within selling, general and administrative expenses. As of March 31,
2024 and 2023, $90 and $14 were unpaid and included in trade payables, respectively. A director of Deliberate is an immediate family
member of Negin Yeganegy, the former Chief Executive Officer and director of PML during the year ended March 31, 2023. As of March 31,
2023, Deliberate held 100,351 shares of Series A preferred stock which were converted into 100,351 shares of common stock in connection
with the closing of the initial public offering on February 12, 2024.
 
On
June 29, 2022, the Company entered into a short-term loan of $202 from Sprk Capital Limited at an interest rate of 16% that was repayable
by December 31, 2022. The principal loan plus interest was repaid in February 2023. Interest expense during the year ended March 31,
2023 was $22. A director of Sprk Capital Limited, Simon Nicholas Champ, is a shareholder of the Company. As of March 31, 2023, Simon
Nicholas Champ held 19,570 shares of Series A preferred stock which were converted into 19,570 shares of common stock in connection with
the closing of the initial public offering on February 12, 2024.
 
On
June 26, 2023, our HSBC trade finance facility became secured by a standby documentary credit for $1,000 from UBS Switzerland AG, which
standby documentary credit is secured by a guarantee from JGA. The JGA guarantee accrues interest of 8% per annum, payable by the Company.
The UBS standby documentary credit expired on November 26, 2023 and was renewed through January 26, 2024. Upon renewal, the interest
accrual increased to 10% per annum. The interest charged for the year ended March 31, 2024 was $56. Such JGA guarantee is in addition
to the $4,000 personal guarantee of the trade finance facility by Mr. Gottschalk, described below.
 
The
Chairman of our board of directors, Max Gottschalk, has provided a $4,000 personal guarantee for all monies, obligations and liabilities
owing by PMA to HSBC, the Company’s principal banking facility provider. The guarantee is a pay-on-demand guarantee securing the
Company’s obligations under the HSBC facility, including interest and bank costs, fees and expenses, up to $4,000.
 
19. SUBSEQUENT EVENTS
 

Employee Stock Plans
 
On
June 18, 2024, the Company granted stock options to employees to purchase a total of 508,194
shares of Common Stock for services rendered and to be rendered. The options have an exercise price of $2.40
per share, expire in ten years, vesting in equal installments over four
years from grant date, employment date, or the date the award was originally approved, but not granted. All the options
were approved previously, but not issued to ensure compliance with UK statutory law. Our board re-approved the grants on June 18, 2024.


 

 F-27 
 

 
INDEX
TO EXHIBITS
 
The
exhibits listed below are filed as part of this Quarterly Report on Form 10-Q, or are incorporated herein by reference, in each case
as indicated below.
 


Exhibit
 
 
 
Incorporated
    by Reference

Number
 
Description
 
Form
 
File
    No.
 
Exhibit
 
Filing
    Date

1.1
 
Underwriting
    Agreement, dated February 7, 2024, by and between the Company and ThinkEquity LLC
 
8-K
 
001-41930
 
1.1
 
February
    13, 2024

 
 
 
 
 
 
 
 
 
 
 

3.1
 
Amended
    and Restated Certificate of Incorporation of the Company
 
8-K
 
001-41930
 
3.1
 
February
    13, 2024

 
 
 
 
 
 
 
 
 
 
 

3.2
 
Amended
    and Restated Bylaws of the Company
 
8-K
 
001-41930
 
3.2
 
February
    13, 2024

 
 
 
 
 
 
 
 
 
 
 

4.1
 
Form
    of the Company’s Common Stock Certificate
 
S-1
 
333-274913
 
4.1
 
November
    6, 2023

 
 
 
 
 
 
 
 
 
 
 

4.2
 
Form
    of Underwriter Warrants
 
S-1
 
333-274913
 
4.2
 
January
    22, 2024

 
 
 
 
 
 
 
 
 
 
 

10.1+
 
Employment
    Agreement between Perfect Moment Ltd. and Jeff Clayborne
 
S-1
 
333-274913
 
10.2
 
November
    6, 2023

 
 
 
 
 
 
 
 
 
 
 

10.2+
 
Amendment
    No. 1 to Employment Agreement between Perfect Moment Ltd. and Jeff Clayborne
 
S-1
 
333-274913
 
10.3
 
January
    22, 2024

 
 
 
 
 
 
 
 
 
 
 

10.3+
 
Independent
    Director Agreement between Perfect Moment Ltd. and Andre Keijsers
 
S-1
 
333-274913
 
10.20
 
January
    18, 2024

 
 
 
 
 
 
 
 
 
 
 

10.4+
 
Independent
    Director Agreement between Perfect Moment Ltd. and Berndt Hauptkorn
 
S-1
 
333-274913
 
10.21
 
January
    18, 2024

 
 
 
 
 
 
 
 
 
 
 

10.5+
 
Independent
    Director Agreement between Perfect Moment Ltd. and Tracy Barwin
 
S-1
 
333-274913
 
10.22
 
January
    18, 2024

 
 
 
 
 
 
 
 
 
 
 

10.6+
 
Form
    of Indemnification Agreement for Directors and Officers
 
S-1
 
333-274913
 
10.21
 
November
    6, 2023

 
 
 
 
 
 
 
 
 
 
 

10.7
 
Guarantee
    Agreement between Perfect Moment Asia Limited and J. Gottschalk & Associates
 
S-1
 
333-274913
 
10.37
 
November
    6, 2023

 
 
 
 
 
 
 
 
 
 
 

10.8
 
Amendment
    to UBS Switzerland AG Standby Documentary Credit
 
S-1
 
333-274913
 
10.40
 
December
    1, 2023

 
 
 
 
 
 
 
 
 
 
 

23.1
 
Consent of Weinberg & Company, P.A.
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

31.1
 
Certification
    of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

31.2
 
Certification
    of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

32.1*
 
Certifications
    of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

32.2**
 
Certifications
    of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

97.1*
 
Perfect Moment Ltd. Clawback Policy
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

101.INS
 
Inline
    XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within
    the Inline XBRL document).
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

101.SCH
 
Inline
    XBRL Taxonomy Extension Calculation Linkbase Document
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

101.CAL
 
Inline
    XBRL Taxonomy Extension Calculation Linkbase Document
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

101.DEF
 
Inline
    XBRL Taxonomy Extension Definition Linkbase Document
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

101.LAB
 
Inline
    XBRL Taxonomy Extension Labels Linkbase Document
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

101.PRE
 
Inline
    XBRL Taxonomy Extension Presentation Linkbase Document
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

104
 
Cover
    Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
 
 
 
 
 
 
 
 

 


+
Indicates
    a management contract or compensatory plan or arrangement.

 

* Filed herewith

**
Furnished herewith.
 

77
 

 
SIGNATURES
 
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused
this annual report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized.
 


 
PERFECT
    MOMENT LTD.

 
 
 

Date:
    July 1, 2024
By:
/s/
    Mark Buckley

 
 
Mark
    Buckley

 
 
Chief
                                            Executive Officer, Director
(Principal
    Executive Officer)

 
 
 

Date:
    July 1, 2024
By:
/s/
    Jeff Clayborne

 
 
Jeff
    Clayborne

 
 
Chief
                                            Financial Officer
(Principal
    Financial and Accounting Officer)


 
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
 


Date:
    July 1, 2024
By:
/s/
    Mark Buckley

 
 
Mark
    Buckley

 
 
Chief Executive Officer, Director
(Principal Executive Officer)

 
 
 

Date:
    July 1, 2024
By:
/s/
    Jeff Clayborne

 
 
Jeff
    Clayborne

 
 
Chief Financial Officer
(Principal Financial and Accounting Officer)

 
 
 

Date:
    July 1, 2024
By:
/s/
    Andre Keijsers

 
 
Andre
    Keijsers

 
 
Director

 
 
 

Date:
    July 1, 2024
By:
    
/s/
    Berndt Hauptkorn

 
 
Berndt
    Hauptkorn

 
 
Director

 
 
 

Date:
    July 1, 2024
By:
/s/
    Jane Gottschalk

 
 
Jane
    Gottschalk

 
 
Director

 
 
 

Date:
    July 1, 2024
By:
/s/
    Matt Gottschalk

 
 
Jane
    Gottschalk

 
 
Director

 
 
 

Date:
    July 1, 2024
By:
/s/
    Tracy Barwin

 
 
Tracy
    Barwin

 
 
Director

 
 
 

Date:
    July 1, 2024
By:
/s/
    Tim Nixdorff

 
 
Tim
    Nixdorff

 
 
Director


 

78

 
